ISLAMABAD: Pakistan’s headline inflation accelerated to record high level in January amid supply constraints for food products and a significant surge in the price of petroleum products.
Consumer prices rose 27.6 per cent compared to 13 per cent in the same month of last year, according to data released by Pakistan Bureau of Statistics (PBS) on Wednesday. This is the highest year-on-year inflation after May 1975 when the median rate clocked in at 27.77 per cent.
On a month-on-month basis, inflation remained elevated, jumping 2.9 per cent as nearly 6,000 containers are stranded in ports, including thousands of tons of poultry feed ingredients that pushed chicken prices to a record earlier this year.
The inflation rate — that has lingered above 20 per cent since June after the coalition government curtailed imports — has been aggravating due to the logjam of containers.
The Wholesale Price Index (WPI), which captures prices in the wholesale market, also rose sharply by 28.53 per cent in January compared to 24 per cent in the same month a year ago.
The PBS reported that the overall inflation rate recorded an increase in both the urban and rural areas. The inflation rate in urban areas surged 24.4 per cent in January and rural areas soared 32.3 per cent over the same month of the last year. In January last year, the inflation rate in urban areas was 13 per cent meanwhile, in rural areas it stood at 12.9 per cent.
Analysts expect inflation rate increase further amid the impact of the recent rupee depreciation and increase in the price of petroleum products.
The food inflation rate in villages and cities skyrocketed 45.2 per cent and 39 per cent, respectively, on a yearly basis. In January 2021, food inflation for villages and cities clocked in at 11.8 per cent and 13.3 per cent, respectively.
The non-food inflation rate was recorded at 15.6 per cent in urban areas and 20.9 per cent in rural areas compared to 12.8 per cent and 13.9 per cent in the same month of last year.
Core inflation — calculated by excluding food and energy items — rose 15.4 per cent in urban areas and 19.4 per cent in a rural area during the month under review, reported the national data collecting agency.
The latest reading comes a week after the State Bank of Pakistan increased its benchmark rate to 17 per cent — highest in more than 24 years to help stabilise an economy that’s spiraling deeper into crisis amid supply shortages, sky-high prices and funding crunch.
The food group saw a price increase of 15.17 per cent in January from the same month a year ago. Within the food group, prices of non-perishable food items surged 12.51 per cent on an annualised basis meanwhile the prices of the perishable goods edged up by 2.66 per cent year-on-year.
The inflation rate for the housing, water, electricity, gas, and fuel group — having one-fourth weight in the basket — rose by 1.84 per cent (year-on-year) in the last month.
Average prices for the clothing and footwear group increased 1.43 per cent in January. Prices related to transportation surged 2.53 per cent (year-on-year).
On a month-on-month basis, the price of chicken skyrocketed 24.62 per cent, followed by a 16.47 per cent surge in wheat price, 14.16 per cent surge in rice, nearly 10 per cent in onions, according to the PBS. The prices of fresh fruits, eggs, pulses, and milk fresh recorded an increase within a range of 2-5 per cent in the last month.
The average inflation rate for the first seven months (July – January) of the current fiscal year came in at 25.4 per cent, according to the PBS.
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