Pakistan Economic Crisis: Inflation Hits Highest Level on Record, Prices in February 2023 Rise by 4.3%
This was the highest annual rate since available data, i.e. July 1965, according to the research firm Arif Habib Ltd, and is also expected to rise even further in the coming months.
Islamabad, March 3: Monthly inflation, measured by a basket of products called the Consumer Price Index (CPI), jumped to 31.6 per cent in February year-on-year, the Pakistan Bureau of Statistics said on Wednesday. Last month, prices rose at the fastest pace ever in the country's history, according to available data, with food, beverage and transport costs driving inflation to a point where analysts fear "families will have to make choices and sacrifices," reported the Dawn.
This was the highest annual rate since available data, i.e. July 1965, according to the research firm Arif Habib Ltd, and is also expected to rise even further in the coming months. Inflation surpassed 30pc last month after having stayed above 20pc for eight months from June to January. Inflation was 12.2pc in February last year, reported Dawn. Costs in four categories -- transport, food and non-alcoholic beverages, alcoholic beverages and tobacco, and recreation and culture -- jumped by around half. Pakistan Economic Crisis Deepens: Industries Bracing for Cut in Production, Layoffs.
Prices in February rose 4.3 per cent compared to January, the highest rate since October's 4.7 per cent. Moreover, Pak Government is undertaking belt-tightening, aims to increase revenues through taxes, and has allowed the rupee to depreciate as it thrashes out a deal with the International Monetary Fund (IMF) to secure more than USD 1 billion in funding, reported Dawn. Meanwhile, Pak rupee plunged by nearly Rs 19 against the US dollar Thursday ahead of the central bank's monetary policy review and amid concerns over a stalled IMF deal, reported Geo News.
The rupee slumped by Rs 18.98 or 6.66 per cent to close at 285.09 against the dollar in the interbank market as per the State Bank of Pakistan (SBP), down from yesterday's close of Rs 266.11. Mustafa Pasha, chief investment officer at Lakson Investments, said: "Inflation is expected to continue rising in the months ahead as IMF-mandated structural adjustments and currency devaluation filter through the supply chain." Pakistan Economic Crisis: Pakistani Citizen Praises PM Narendra Modi, Says 'Friendship With Indian Prime Minister Will Boost His Country’s Conditions' (Watch Video).
Also, following a historic decline of the Pakistani rupee against the US dollar, the per tola gold price in Pakistan surged by a whopping 4.77 per cent as investors' attention once again diverted towards the precious commodity considered as an inflation hedge, reported Geo News. According to All-Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold (24 carats) surged by Rs 9,400 per tola and Rs 8,058 per 10 grams to settle at Rs 206,500 and Rs 177,040, respectively.
The massive increase in the price of gold came on after the rupee plunged by nearly Rs 19, or 6.66 per cent, against the US dollar to close at 285.09 against the dollar in the interbank market. While gold is considered a hedge against inflation, recent central bank rate hikes to bring down price pressures have weighed on the appetite for the metal since it yields no interest, reported Geo News.
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