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Tuesday June 25, 2024

Pakistan's CPI inflation spikes to record high on runaway food prices

PBS data shows that CPI-based inflation hit 36.4% in April 2023, while it increased 1.6% in May MoM

By Business Desk
June 01, 2023
An undated image of consumers buying fresh vegetables from a local market. — AFP/File
An undated image of consumers buying fresh vegetables from a local market. — AFP/File

The consumer price index (CPI) based inflation in Pakistan surged to a record 38% on a year-on-year (YoY) basis in May 2023, the highest since July 1965, largely fired up by runaway food prices that continue to defy curbs.

Pakistan Bureau of Statistics (PBS) data showed that CPI-based inflation hit 36.4% in April 2023, while it increased 1.6% in May month-on-month (MoM).

“This reading takes 11MFY23 average inflation to 29.2% compared to 11.3% in 11MFY22,” brokerage Arif Habib Limited noted in a report.

The food inflation in urban areas jumped by a whopping 48.1% in May 2023 compared to May 2022, while the rural areas saw a 52.4% increase in consumer prices year-on-year.

Alpha Beta Core CEO Khurram Schehzad said that CPI Inflation in Pakistan for May 2023 clocked in at 38% compared to 36% in April.

"The May 2023 inflation is the highest monthly CPI recorded since 1965 (barring few years in between due to non-availability of monthly records)," Schehzad told The News.  

The analyst noted that food was the "key culprit" for the rising inflation.

The latest 38% rise tops that of Sri Lanka, which posted annual inflation of 25.2% in May.

Inflation has been on an upward trend since early this year after the government took painful measures as part of fiscal adjustments demanded by the International Monetary Fund (IMF) to unlock stalled funding, which still has not been disbursed.