Pakistan’s inflation touches record high amid turmoil

Islamabad: Consumer inflation in Pakistan raced to 38 per cent in May, the highest annual rise in prices on record, driven mainly by skyrocketing costs of food, house rents, electricity and gas bills, and transport, official data revealed.

Non-perishable foods and transport costs climbed more than 50 per cent over May 2022, while average inflation for this fiscal year has reached 29.2 per cent, Dawn news reported citing the data from the Pakistan Bureau of Statistics.

The May reading exceeded the Finance Ministry’s projection of 34-36 per cent for the month and comes as political turmoil continues to roil the country.

Years of financial mismanagement, rupee depreciation and the government’s failure to unlock IMF funding have also played a role in taking annual price hikes to such record highs, Dawn reported.

Official data showed that the average price of a 20 kg wheat flour bag more than doubled to around 2,700 PKR in May compared to the same month a year ago.

The average price of chicken (live) rose by 38.6 per cent to 435 PKR per kg, that of milk by 41 per cent to 170 PKR a litre, and that of eggs by 85 per cent to 280 PKR a dozen.

Pulses and vegetables also became costlier, Dawn reported.

However, monthly inflation — measured by a basket of products and services called the Consumer Price Index (CPI) — is likely to go down from June due to a high-base effect.

It has been rising since mid-2022 after the government took painful measures as part of fiscal adjustments demanded by the International Monetary Fund to unlock stalled funding.