Inflation at 50-year high in crisis-hit Pakistan
April 1, 2023 04:03 PM
Pakistan's year-on-year inflation hit 35.37 percent in March -- the highest in nearly five decades -- as the government scrambled to meet International Monetary Fund (IMF) conditions to unlock a desperately needed bailout.
Month-on-month inflation was 3.72 percent, according to government data released Saturday, while the average inflation rate for the past year was 27.26 percent.
Years of financial mismanagement and political instability have pushed Pakistan's economy to the brink of collapse, exacerbated by a global energy crisis and devastating floods that submerged a third of the country in 2022.
The country needs billions of dollars of financing to service existing debt, while foreign exchange reserves have dwindled and the rupee is in freefall.
Poor Pakistanis are feeling the brunt of the economic turmoil, and at least 20 people have been killed since the start of the Muslim fasting month of Ramadan in crowd crushes at food distribution centres.
"The way inflation is rising, I believe a famine-like situation has been simmering," said Shahida Wizarat, a Karachi-based analyst.
At least 12 people were killed Friday in a crowd crush in Pakistan's southern city of Karachi at a factory distributing Ramadan alms.
The South Asian nation -- home to more than 220 million -- is deep in debt and must enact tough tax reforms and push up utility prices if it hopes to unlock another tranche of a $6.5 billion IMF bailout and avoid defaulting.
Inflation is expected to stay at "elevated" levels, the finance ministry said, "owing to market frictions caused by relative demand and supply gap of essential items, exchange rate depreciation and recent upward adjustment of administered prices of petrol and diesel."