The consumer price index (CPI) surged to a multi-decade high of 27.3% in August from a year earlier, data released by the Federal Bureau of Statistics showed on Thursday, as authorities warn massive flooding in the country could exacerbate the already skyrocketing prices.
Inflation for urban areas was recorded at 26.2%, the rate in rural areas was recorded to be the highest at 28.8%.
The data shows that the inflation rate in the country increased by 2.4% during August on a month-on-month basis.
The year-on-year CPI – which is the general measure of inflation – stood at 27.3% in August 2022 – the highest in 49 years.
This is the highest inflation since November 1973, experts and a report by Arif Habib Limited said.
The inflation for the food group was recorded at 29.5% in August on a year-on-year basis.
Inflation in the housing group was also above the headline inflation at 27.6%. Food and housing group items weigh heavily in the basket of around 100 items used for measuring inflation with 34.6% and 23.6% share, respectively.
All 12 but one groups of CPI have entered double-digit inflation with clothing and footwear at 17.6%, restaurants and hotels at 27.4%, transport 62%, household equipment 21.9%, education 10.0%, health 11.9%, communication 1.2%, recreation and culture 21.8%, alcoholic beverages and tobacco 25.8%, and miscellaneous at 20.0%.
This simply means that while communication remains cheaper in Pakistan, meeting food, housing, and transport needs is becoming more expensive and inflation in these group remains even higher than the average inflation of 27.3%.
Education and health now also cost more though their cost has not increased as much as your food or fuel bill.
On a month-on-month basis, food items have contributed heavily to the rising inflation with tomatoes becoming 52.85% expensive in August compared to July.
The overall price of vegetables rose by 13.44%, moong dal rose by 15.27%, dal mash by 12.47%, dal masoor by 11.76%, dal chana by 6%, eggs by 7.53%, and besan by 6.5%.
The price of potatoes increased by 5%, and cooking oil by 2.5%. However, fruits became cheaper by 20%, chicken by 11.54%, and motor fuel by 2.60%.
Electricity costs increased 19.73% in August, while ready-made garments soared by 8% and construction materials by 7.5%.
Sharp increase since May Inflation in Pakistan has increased since May this year on the back of rising global commodity prices and increasing fuel import costs.
The Pakistani rupee also came under pressure due to political and economic uncertainty.
The inflation rate stood at 13.8% in May but rose sharply to 21.3% in June and has constantly been rising. In July inflation was recorded at 24.9%, which was the highest in 14 years.
Pakistan’s 220 million people were already facing rampant inflation before the flooding and the economy is in turmoil, with fast-depleting foreign reserves and a record fall of the rupee against the dollar.
Officials say more than 2 million acres (800,000 hectares) of agricultural land have been flooded, destroying most standing crops and preventing farmers from sowing new ones.
Authorities are looking for ways to fast-track food imports. Commerce Minister Naveed Qamar said on Wednesday the government was close to an agreement to import vegetables and other edible goods from Iran and Afghanistan, and an urgent request had gone to the cabinet to approve it.
Increase in inflation YoY
* Transport: 63.08%
* Perishable food items: 33.85%
* Non-perishable food items: 28.25%
* Housing and utilities: 27.57%
* Restaurants and hotels: 27.43%
* Alcoholic beverages and tobacco: 25.78%
* Furnishing and household equipment maintenance: 21.86%
* Recreation and culture: 21.78%
* Miscellaneous goods and services: 19.97%
* Clothing and footwear: 17.63%
* Health: 11.89%
* Education: 9.99%
* Communication: 1.23%