Inflation in Pakistan climbed to a record-breaking 31.5 percent in February, primarily due to a massive jump in prices of food and fuel.
According to data issued by the Pakistan Bureau of Statistics (PBS), inflation—measured by the consumer price index (CPI)—surged to 31.5 percent year-on-year during February, the highest annual rate since the country started recording the statistic in July 1965. Previously, the highest recorded annual inflationary hike was in April 1975 at around 29 percent. By comparison, inflation during February 2022, a year ago, was 12.2 percent.
The Wholesale Price Index (WPI), which monitors prices in the wholesale market, also rose to 36.4 percent in February, compared to 23.6 percent a year earlier. Core inflation, calculated after excluding energy and food prices, climbed to 17.1 percent in urban areas for February, and 21.5 percent in rural areas, suggesting inflationary pressures are now impacting a majority of goods and services.
According to the PBS, inflation increased in both rural and urban areas, with the former recording 35.6 percent inflation year-on-year and the latter 28.8 percent. By comparison, inflation in urban areas was recorded at 11.5 percent last February and 13.3 percent in rural areas.
The biggest reason for the inflationary pressure has been a drastic jump in food prices, with the PBS data showing that inflation rate in villages and cities climbed to 47 and 41.9 percent, respectively. Non-food inflation, meanwhile, was recorded at 20.8 percent in urban areas and 25.3 percent in rural areas, compared to just 9.9 percent and 12.2 percent, respectively, during February 2022. A key factor within food inflation was price hikes of perishable items, which surged by 16.14 percent year-on-year.
Also contributing to the inflation is the housing, water, electricity, gas, and fuel group, which rose by 3.11 percent year-on-year in February. The transport group, meanwhile, increased by 3.34 percent, while prices related to the hospitality sector surged by 2.36 percent.
Between January and February 2023, the price of chicken meat jumped by 19.82 percent; cooking oil 17.21 percent; vegetable ghee 16.59 percent; cigarettes 15.64 percent. The prices of pulses, fish, meat, and fresh milk also recorded increases over the past month.
The average inflation rate for the first eight months (July-February) of the current fiscal year came in at 26.19%, according to the PBS. According to analysts, the unceasing rise in inflation is likely to encourage the State Bank of Pakistan to announce a further increased to benchmark interest rates during a meeting of the monetary policy committee slated for today.