- On a month-on-month basis, inflation increased by 2.9 percent.
- Consumer prices increase due to food supply constraints.
- The average inflation rate in July and January of FY23 has reached 25.4%.
Pakistan’s headline inflation hit record highs in January amid food supply constraints, a sharp rise in oil prices and stagnation, as well as a decline in income.
According to data released by the organization, consumer prices rose 27.6 percent compared to 13 percent in the same month last year. Pakistan Bureau of Statistics (PBS) on Wednesday. This is the highest annual inflation rate since May 1975, when the average rate reached 27.77 percent.
On a month-on-month basis, inflation remained high, jumping 2.9 percent as nearly 6,000 containers were stuck at ports, including thousands of tons of raw poultry feed, which pushed chicken prices to a record high earlier this year.
Inflation – which has hovered above 20 percent since June after the coalition government clamped down on imports – has been exacerbated by a glut of containers.
The Wholesale Price Index (WPI), which tracks prices in the wholesale market, also rose by 28.53 percent in January compared to 24 percent in the same month last year.
PBS reported that overall inflation rates increased in both urban and rural areas. The inflation rate in urban areas in January increased by 24.4% and in rural areas by 32.3% compared to the same month last year. In January last year, the inflation rate was 13% in urban areas and 12.9% in rural areas.
Analysts expect the inflation rate to rise further amid the impact of the recent devaluation of the rupee and the rise in the price of petroleum products.
The inflation rate of food in villages and cities increased by 45.2% and 39% respectively. In January 2021, food inflation for rural and urban areas was 11.8 percent and 13.3 percent, respectively.
The rate of non-food inflation in urban areas is 15.6% and in rural areas it is 20.9% compared to the same month last year, 12.8% and 13.9% respectively.
Core inflation — calculated to include food and energy — rose 15.4 percent in urban areas and 19.4 percent in rural areas in the month under review, the National Data Collection Agency reported.
The latest reading comes a week after the State Bank of Pakistan raised its benchmark rate to 17 percent — the highest rate in more than 24 years — to help stabilize an economy that has been reeling amid tight supply, sky-high prices and tight liquidity. The budget is sinking deeper into crisis.
The price of food group increased by 15.17% in January compared to the same month of the previous year. In the food group, the price of non-perishable food items increased by 12.51% annually. Meanwhile, the price of perishable goods increased by 2.66 percent compared to the same period last year.
The inflation rate of the housing, water, electricity, gas and fuel group – weighing a quarter in the shopping basket – increased by 1.84% (annualized) last month.
The average price of clothing and footwear group increased by 1.43% in January. Transportation prices increased by 2.53 percent (year-on-year).
According to PBS, chicken prices rose 24.62% on a monthly basis, followed by a 16.47% increase in wheat prices, a 14.16% increase in rice prices, and a nearly 10% increase in onion prices. The prices of fresh fruits, eggs, beans and fresh milk have increased between 2 and 5 percent in the last month.
PBS data shows that the average inflation rate for the first seven months (July to January) of the current fiscal year has reached 25.4 percent.