Pakistan's inflation rises to 24.5% in December

Photo: DAWN

Pakistan's annual inflation measured by the Consumer Price Index (CPI) was recorded at 24.5% in December, compared to 23.8% in the previous month, as food and transport costs continued to remain high, data shared by the Pakistan Bureau of Statistics (PBS) showed on Monday.

Inflation rose 0.5% on a month-on-month basis, compared to a 0.76% increase in November, Pakistani news outlet DAWN has reported.

Headline inflation, which captures all the goods and services in an economy, is calculated by the Consumer Price Index (CPI) tracking the prices of 356 items from urban areas and 244 items from rural areas.

Pakistani brokerage house Topline Securities said that inflation remained in line with market expectations.

Except for housing and utilities and communication, practically other indices in the PBS data showed double-digit growth. Perishable food items and transportation, which had been the primary causes of inflation during the previous months, had a month-on-month decrease of 12.58% and 0.81% respectively.

Last week, the Pak finance ministry's forecast said inflation would stay high – between 21-23% during the current fiscal year.

"For FY23, economic growth is likely to remain below the budgeted target due to devastation caused by floods. This combination of low growth, high inflation and low levels of official foreign exchange reserves are the key challenges for policymakers," the ministry said in its Monthly Economic Update and Outlook.

Pakistan has been in the grips of decades-high inflation in the past few months but the CPI hike slowed down in September to 23.2% from a 49-year high of 27.2% in August, reports DAWN.

The trend reversed the very next month when headline inflation rose sharply to 26.6% in October, prompting the central bank to raise the key policy rate by 100 basis points to a 24-year high of 16% in a decision it said was "aimed at ensuring that elevated inflation does not become entrenched".

Inflation then eased marginally to 23.8% in November before rising again this month.