Annual inflation surged to a decades-high level of 27.55 percent in January, up from 24.5 percent in December, as the cost of food and transportation remained high.
According to Arif Habib Limited, the CPI statistic was the highest since May 1975, when it was 27.77 percent. Inflation in January 2022 was 13 percent.
The Pakistan Bureau of Statistics (PBS) reported that the annual inflation rates in urban and rural areas were respectively 24.38 and 32.26 percent.
According to PBS figures, monthly inflation rose by 2.9 percent. A double-digit increase in practically all sub-indices, particularly food and transportation, whose costs have been rising quickly, was what drove the inflationary trend.
Index-wise increase in inflation YoY:
- Perishable food items: 61.63pc
- Recreation and culture: 44.14pc
- Non-perishable food items: 40.34pc
- Transport: 39.1pc
- Alcoholic beverages and tobacco: 36.33pc
- Restaurants and hotels: 30.1pc
- Furnishing and household equipment maintenance: 29.9pc
- Miscellaneous goods and services: 28.69pc
- Health: 18.73pc
- Clothing and footwear: 16.76pc
- Education: 10.58pc
- Housing and utilities: 7.83pc
- Communication: 1.57pc
The CPI figure was higher than the government’s expectation of 26pc, which itself was more than double the budgeted 11.5pc target.
The Ministry of Finance stated in its Monthly Economic Update & Outlook that “the Consumer Price Index (CPI) inflation on a year-over-year basis for January is forecast in the range of 24-26pc,” adding that the current political and economic uncertainties were both driving inflationary expectations higher.
The government also increased its annual inflation projection from the 21-23 percent it had predicted in December to 24-26 percent. The local currency lost Rs38.74 between January 26 and January 30 as a result of the government removing an unofficial ceiling on the USD-PKR exchange rate at the end of last month. Additionally, it raised the cost of gasoline by Rs35 per litre. The CPI has not yet fully reflected the full effect of these actions.
