September 10, 2023
Economy Pakistan

Pakistan’s Consumer Price Index (CPI) Hits Record High of 31.55% in February

Pakistan’s annual inflation rate, measured by the Consumer Price Index (CPI), has hit a record high of 31.55% in February 2022, compared to 27.6% in January 2022. This inflation surge has been driven by significant increases in food and transport prices, according to local media.

According to Arif Habib Corporation, this is the highest-ever CPI increase based on available data since July 1965. Meanwhile, the Pakistan Bureau of Statistics (PBS) revealed that inflation in urban and rural areas increased to 28.82% and 35.56% year-on-year, respectively. On a month-on-month basis, inflation rose by 4.32%.

Consumer prices have been on the rise for several months, with annual inflation remaining above 20% since June 2021. The February inflation increase was caused by a double-digit rise in all sub-indices except for one.

The Ministry of Finance had previously forecast that inflation would hit 30% but the current figure is higher. According to the ministry, CPI-based inflation on a year-on-year basis will be between 28% and 30% in the coming months, stating that political and economic uncertainties have contributed to inflationary expectations.

The ministry expects inflation to remain high due to the uncertain political and economic environment, currency depreciation, rise in energy prices and an increase in administered prices. Although the State Bank of Pakistan has enacted a contractionary monetary policy, inflationary expectations may take some time to settle. The Centre is closely monitoring the demand-supply gap of essential items in liaison with provincial governments, and is taking necessary measures to stabilize their prices, the report added.

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