Pakistan inflation jumped to 48 years high

02/02/2023

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Pakistan inflation jumped to 48 years high

Pakistan’s inflation reached to at the highest level in last 48 years in January as thousands of containers of food items, raw materials and equipment are stuck in ports after the cash-strapped government curtailed imports.

According to data released by the statistics department, consumer prices climbed up to 27.55% from a year.

Report by Central Bank of Pakistan:

Central Bank of Pakistan has reported that Inflation is at the highest since May 1975.

The State Bank of Pakistan has hiked its benchmark rate to the highest in more than 24 years for stabilizing an economy that’s spiraling deeper into crisis amid supply shortages, sky-high prices and funding crunch.

Pakistan’s situation has slides into the more crucial after last year’s devastating floods that amplified the impact of political turmoil and the fallout from the war in Ukraine.

Economists around the globe:

Some economist around the globe believed that the economy of Pakistan will likely continue to accelerate as the government struggles to fulfill the International Monetary Fund’s aid conditions to secure much-needed dollars.
Economists predict that inflation climbing in coming months on a combination of rupee depreciation and accelerating fuel prices and electricity tariffs.
The government of Pakistan might be raised additional taxes on the IMF’s insistence and it will likely force the State Bank of Pakistan to increase interest rates further.

Reasons of Pakistan’s inflation:

About 6,000 containers are leave behind at the ports, including thousands of tons of poultry feed ingredients that pushed chicken prices to a record earlier this year.
The logjam is exacerbating inflation that has lingered above 20% since June as the government controlled imports amid scare funds.
The latest inflation impress is higher than the central bank’s November figure of 21%-23% for the year ending June, which was already revised higher from a projection made in October.
Foreign-currency reserves have nosedive to a nine-year low of $3.68 billion, equivalent to less than a month of imports while local banks have been rejecting to issue letters of credit, leading to a standstill that puts businesses at risk of shutting down.
The local currency engrossed to a record low recently after money exchangers ended the limit on the dollar-rupee rate in the open market to curb the black market.