Pakistan Economic Crisis: Weekly Inflation in the Cash-Strapped Country Reaches All-Time High of 47.23%
The weekly inflation measured by the Sensitive Price Index (SPI) reached an all-time high of 47.23 per cent year-on-year (YoY) for the week that ended on April 19, The Express Tribune reported.
Islamabad, April 21: The weekly inflation measured by the Sensitive Price Index (SPI) reached an all-time high of 47.23 per cent year-on-year (YoY) for the week that ended on April 19, The Express Tribune reported.
The data released by the Pakistan Bureau of Statistics (PBS) revealed that the increase was particularly driven by rising food prices, which resulted in a 0.51 per cent increase in short-term inflation on a week-on-week basis, as per the news report. Pakistan Economic Crisis: Nawaz Sharif, Maryam Nawaz Hold ‘Positive’ Meeting With Saudi Crown Prince Mohammed Bin Salman.
The SPI monitors the prices of 51 essential items in 50 markets in 17 cities of Pakistan. According to the statistics, the prices of 29 items have increased while the price of eight items witnessed a drop and 14 remained stable, according to The Express Tribune. Pakistan Minister Bilawal Bhutto To Visit India In May, Says ‘Visit Not In Terms Of Bilateral Ties’.
The development comes after the inflation in March reached an unprecedented level, caused by a rise in costs of food, beverages and transportation, forcing households to make difficult choices, as per the news report.
The Consumer Price Index (CPI), which measures monthly inflation, increased to 35.37 per cent Year on Year in March. It is the highest rate since available data in July 1965, The Express Tribune reported citing research firm Arif Habib Ltd.
The Pakistan government has been implementing measures like fuel and power tariff hikes, subsidy withdrawals, market-based exchange rates, and higher taxation under the International Monetary Fund (IMF) programme in order to address the fiscal deficit, as per the news report. These actions might result in sluggish growth in the economy and a rise in inflation in the coming months.
Earlier this month, the World Bank estimated a drop in GDP per capita income for Pakistan from USD 1,613.8 in 2021-22 to USD 1,399.1 in 2022-23, Business Recorder reported.
In its report 'Macro Poverty Outlook for Pakistan: April 2023', the bank noted that GDP per capita growth is estimated at -1.5 per cent in 2022-23 in comparison to 4.2 per cent in 2021-22. World Bank has cut Pakistan's GDP forecast to 0.4 per cent, as per the Business Recorder report.
The unemployment rate in Pakistan is estimated to rise from 10.2 per cent in 2022-23 to 10.1 per cent in 2021-22. Poverty will inevitably rise with pressures from weak labour markets and high inflation, as per the Business Recorder report. In the absence of higher social spending, the lower-middle-income poverty rate is expected to rise to 37.2 per cent in FY23.
Gross investment is estimated to reduce to 106 per cent in 2022-23 compared to 13.3 per cent in 2021-22, as per the Business Recorder report. Gross Investment-Public is estimated to reach 2.8 per cent in 2022-23 in comparison to 3.4 per cent in 2021-22.
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