Annual Inflation in May Reaches Record Level of 37.97pc
The statistics agency said on Thursday that Pakistan’s annual inflation increased to 37.97% year-over-year in May, continuing the rise of the nation’s highest-ever inflation rate.
The reading exceeds the finance ministry’s forecast of 34–36 percent for May, which was included in its monthly economic update and outlook. According to that report, after reaching a peak this month, inflation would begin to decline due to an easing in global commodity prices, which would mitigate the negative effects of currency depreciation.
Prior to April, 36.4 percent was the greatest percentage of inflation measured year over year.
According to a press statement from the agency, the increase from month to month in May was 1.58 percent, with vegetables, pulses, and poultry prices posting the largest rises.
Since the government implemented severe measures as part of the budgetary adjustments required by the International Monetary Fund (IMF) to release frozen cash that has still not been delivered, inflation has been on the rise.
The Consumer Price Index (CPI), a basket of goods and services that is broken down into 12 key components with varying weights, is used to monitor inflation.
The statistics office today issued data showing that the categories of alcoholic drinks and cigarettes (123.96%), recreation and culture (72.17%), and transportation (52.92%) had the biggest year-over-year growth.
Cigarettes, potatoes, wheat flour, tea, wheat, eggs, and rice were the main products in the food group whose prices climbed the greatest in May compared to the previous year. Textbooks, stationery, motor fuels, washing soaps, detergents, and match boxes suffered the largest price increases in the non-food category.
In May, the CPI showed increases of 42.18 percent in rural regions and 35.09 percent in urban areas when compared year over year.
With the most recent CPI hike, average inflation in the first 11 months of this fiscal year—from July to May—has increased to 29.16 percent from the previous year’s 11.29 percent.
The Economic Advisors’ Wing of the Finance Ministry identified many factors, including flood damage, supply chain disruptions, devaluation brought on by macroeconomic imbalances, and political unpredictability, as probable causes of the rising price levels in its monthly economic update.