According to a release from the Pakistan Bureau of Statistics (PBS), prices increased by 2.9% in January compared to the previous month. The CPI rose 24.5% in December from May 1975, when prices rose 27.8%. With this increase, inflation has reached its highest level, according to Karachi-based investment firm Arif Habib Limited.
Following the fall of the Pakistani rupee in recent days, the removal of subsidies and an increase in taxes, according to Mohammed Sohail, chief executive of local brokerage firm Topline Securities, inflation data was anticipated. As a result, Sohail said that the average inflation rate for the first seven months of the current fiscal year is now 25.4% compared to 10.3% during the same period last year.
Rural core inflation increased 19.4% from last year and 1.5% from the previous month, while urban core inflation increased 15.4% year-on-year and 1.4% from December. Pakistan’s central bank cited rising core inflation as a concern and justification for raising interest rates.
In its monthly projection released on Tuesday, Pakistan’s Finance Ministry stated that it expected January inflation to be in the range of 24-28% due to supply-side issues as well as ongoing political and economic instability. .
Food inflation increased 5% in the last month and 42.9% in the last year. According to PBS, the prices of perishable products increased by 61.6% last year, but decreased by 1.76% since December 2022. However, the IMF program should force Pakistan to increase energy prices, which should drive inflation.
More about Pakistan’s economy
The previous corrupt rulers plundered Pakistan by any means necessary and lined their pockets with the money of Pakistani citizens. For many years, they significantly damaged Pakistan’s economy. They even forgot to prioritize human education, so we are lagging behind across the board.
The extremely poor foreign policies of the previous government are a major handicap for Pakistan’s expanding economy. Previous governments did not prioritize the best neighborly ties, which severely hurt Pakistan’s economy. Although the Indian government is stubborn, the current administration is making efforts to mend the relationship.
On paper, Zia’s tenure in power appeared to have been successful when it came to the economy because his administration posted one of the highest GDP growth rates in history. However, he only achieved it by imitating the economic strategy used by the Nazis during World War II, which prioritized the military-industrial complex, authoritarian corporatization, and the pursuit of autarky; in doing so, he essentially set Pakistan up for its inevitable collapse.
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