Pakistan's inflation soars to 35.4 per cent in March, highest in over five decades

Pakistan's Consumer Price Index (CPI)-based inflation skyrocketed to 35.4% in the month of March, marking the sharpest annual rise in prices since the year 1965. The figure is the highest in over five decades and comes at a turbulent time for Pakistan's government as it struggles to meet the conditions put forth by the International Monetary Fund (IMF) for a bailout.

The data was revealed by research firm Arif Habib Ltd and was confirmed by the Pakistan Bureau of Statistics. A spokesperson for the bureau said in a statement that "this is the highest ever inflation recorded in the data we have," Pakistani news outlet Business Recorder reported.

The monthly inflation is calculated by a basket of products and services known as the CPI. Between last year's June to January this year, it managed to float above 20%. However, in February, the number hit 31.6%, until finally crossing 35%. The latest figure is a sharp increase from the 12.7% reading of March 2022.

Pak ministry warns of further rise in inflation

This comes merely days after Pakistan's Finance Ministry forecasted that inflation is expected to surge even more in the near future amid a deepening economic crisis. The ministry cited the prediction of the Sharif administration's decisions to increase prices of energy and fuel, as well as the central bank’s latest policy rates.

“Inflation may further jack up as a result of a second-round effect,” the ministry stated in its Monthly Economic Update and Outlook, according to Dawn. 

In addition to that, the ministry said that the floods that swept the country last year have yielded long-term repercussions, such as setbacks in agricultural productivity. “Consequently, the shortage of essen­tial items has emerged and persisted,” the ministry said, adding that “another potential reason for rising price levels is the political and economic uncertainty,” the ministry further added. Furthermore, the ministry said that Ramadan festivities have also thrown off the balance of the demand and supply chains.