Pakistan's headline inflation surged to a record high in January, owing to food supply problems, a large increase in petroleum product costs, and stagnant or falling salaries.
According to statistics issued on Wednesday by the Pakistan Bureau of Statistics (PBS), consumer prices increased 27.6% in March compared to 13% in the same month last year. This is the greatest year-on-year inflation rate since May 1975, when the median rate was 27.77%.
Inflation remained elevated on a month-to-month basis, rising 2.9% as roughly 6,000 containers remain delayed at ports, including hundreds of tonnes of poultry feed components that pushed chicken prices to a record earlier this year.
The container backlog has exacerbated the inflation rate, which has remained above 20% since June when the coalition government restricted imports.
The Wholesale Price Index (WPI), which tracks wholesale market prices, increased by 28.53% in January compared to 24% the previous year.
According to the PBS, the general inflation rate increased in both urban and rural areas. In January, urban inflation was 24.4% higher than the previous year, while rural inflation was 32.3% higher. In January of last year, the urban inflation rate was 13%, while the rural rate was 12.9%.
Analysts anticipate that inflation would rise further as a result of the recent rupee loss and increase in the price of petroleum items.
Food inflation rates in villages and cities increased by 45.2% and 39%, respectively, year on year. Food inflation in rural and towns was 11.8% and 13.3%, respectively, in January 2021.
Non-food inflation was 15.6% in cities and 20.9% in rural regions, compared to 12.8% and 13.9% in the same month last year.
Core inflation, which excludes food and energy, increased 15.4% in urban areas and 19.4% in rural regions during the month under review, according to the national statistics collection agency.
The new report comes only a week after the State Bank of Pakistan raised its benchmark rate to 17%, the highest in more than 24 years, in an effort to assist stabilise an economy that is spiralling further into disaster due to supply shortages, sky-high prices, and a finance constraint.
Food prices increased by 15.17% in January compared to the same month last year. Non-perishable food costs increased by 12.51% year on year within the food group, whereas perishable products prices increased by 2.66% year on year.
Housing, water, electricity, gas, and fuel inflation climbed by 1.84% year on year in the previous month, accounting for one-fourth of the basket's weight.
In January, the average price of apparel and footwear climbed by 1.43%. Transportation costs increased by 2.53%. (year-on-year).
According to PBS, the price of chicken increased by 24.62% month on month, followed by a 16.47% increase in wheat, a 14.16% increase in rice, and a nearly 10% increase in onions. Prices for fresh fruits and vegetables, eggs, legumes, and milk have increased by 2-5% in the previous month.
According to PBS statistics, the average inflation rate for the first seven months (July-January) of the current fiscal year was 25.4%.
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