Inflation hits 30-year high

Pakistan’s inflation hit a 30-year high in June, official figures showed on Friday, with experts forecasting it will take months to be reined in.

The country’s Federal Bureau of Statistics (FBS) said in its August report that the consumer prices index jumped 25.33 percent from a year earlier, after reaching 24.33 percent in July.

“We are facing super inflation in our country,” Kaiser Bengali, an economist and head of the government’s poverty-alleviation based Benazir Income Support Programme will take a minimum of six months to get the inflation decreased if sustainable fiscal management is applied by the government,” he said, adding that Pakistan was facing double-digit inflation for three years.

Figures released by the FBS on Friday showed that food inflation soared to 34.01 per cent in August — the highest in the region and the country’s history — over the corresponding month of last year. Prices of non-perishable food items saw an increase of 37.58 per cent and of perishable items 35.26 per cent.

Tomatoes, potatoes, spices, tea, sugar, onions, masoor, milk powder, wheat, beverages, vegetable ghee, cooking oil, fresh milk, honey, milk products, bakery and confectionary items, wheat flour, meat, rice, cereals, whole gram, gur, eggs, precooked food and mustard oil saw unprecedented price hikes in August.

Analysts cautioned the new political government that the price hike was pushing the country towards a long-term recession, which might lead to increase in poverty and food insecurity. The non-food and non-energy core inflation swelled to 16.1 per cent, the highest in the past couple of years, as against six per cent of last year, on account of rising house rent and medicare sub-indices despite the tight monetary policy of the State Bank. House rent increased by 14.18 per cent and medicare cost by 9.9 per cent.

Non-food inflation spiked to over 21 per cent in August over the last year month. Transportation charges recorded an increase of 40.50 per cent and education 15.41 per cent. The wholesale price index, the most commonly used measure to monitor the cost of production, rose to 35.73 per cent in the first two months of the current fiscal year. It indicated an increase in prices of 425 items at the wholesale level. The trend shows that prices at the retail level will increase further.

The average weekly inflation of essential commodities witnessed an increase of 33.85 per cent during the month under review over last year.