March inflation jumps to 35.37 percent, highest since 1965
On Saturday, the Pakistan Bureau of Statistics (PBS) released data indicating that inflation, as measured by the Consumer Price Index (CPI), reached an all-time high of 35.37 per cent year-on-year (YoY) in March.
In March 2022, inflation was recorded at 12.72pc.
According to data released by PBS, prices in urban and rural areas increased 32.97pc and 38.88pc year-on-year, respectively.
The short-term rate of inflation measured by the Sensitive Price Indicator (SPI) last week hit a record 46.65pc, while monthly inflation recorded by the CPI reached 31.6pc in February — the highest in six decades.
Consumer prices have risen sharply over the past several months, with annual inflation above 20pc since June last year.
Index-wise increase in inflation YoY:
1. Transport: 54.94pc
2. Alcoholic beverages and tobacco: 47.15pc
3. Recreation and culture: 50.59pc
4. Perishable food items: 51.81pc
5. Non-perishable food items: 46.44pc
6. Restaurants and hotels: 38.49pc
7. Furnishing and household equipment maintenance: 38.99pc
8. Miscellaneous goods and services: 34.43pc
9. Health: 18.46pc
10. Clothing and footwear: 21.93pc
11. Housing and utilities: 17.49pc
12. Education: 7.18pc
13. Communication: 6.64pc
In its Monthly Economic Update & Outlook, the finance ministry forecasted inflation to rise further on Friday due to a second-round effect of policy decisions made earlier to raise energy and fuel prices, the central bank’s policy rate, and the rupee’s depreciation to secure IMF funding.
The Economic Adviser’s Wing of the finance ministry also conceded ineffective policy measures and the haplessness of the authorities in containing the inflationary spiral.
“Despite SBP’s contractionary monetary policy, the inflationary expectations are not settling down,” it said and also tried to attribute the challenge to Ramazan-oriented demand pressures.
It warned that bulk buying during Ramazan might cause a demand-supply gap and result in an escalation of essential items' prices, although the government was alert to the situation and had already taken on board all provincial governments to ensure a smooth supply of essential items.