Pakistan Inflation stalls high despite IMF bailout

Headline inflation in Pakistan has spiked to 27.4% year-on-year in August, official data showed, as a tumbling rupee and soaring bills blamed on an IMF bailout package hampered government efforts to rein in prices, reported 24NewsHD TV channel.

Pakistan was on the brink of default this summer before the International Monetary Fund agreed to a lifeline deal on the condition that the government cut subsidies that had cushioned living costs.

Since then, the rupee has crossed a historic threshold of Rs300 to the dollar, whilst Islamabad has hiked petrol prices and electricity costs have spiked, sowing widespread discontent.

Prices rose 1.7 percent month-on-month in August, according to government statistics released Friday, and the year-on-year figure of 27.4 percent was only one point shy of July's, signalling little relief.

In August, motor fuel cost 8 percent more than July, whilst water bills in urban areas rose more than 11 percent and the price of tomatoes was up as much as 82 percent.

Pakistan's retailers said they will keep shops shuttered Saturday in protest over the soaring costs which have become a lightning rod for public anger ahead of forthcoming general elections.

According to the Pakistan Bureau of Statistics, inflation rose to 27.38% during a period from July to August. During this period, prices of spices increased by 16.9%, eggs by 16.2%, and sugar by 9%.

In a week, the rate of sugar has increased by Rs11.54 per kg. The maximum price of sugar has increased to Rs 190 per kg.

In August, the prices of Daal Mash and dry milk increased by 5.5%, wheat products by 5%, potatoes by 4.3%, rice by 2.6%, liquid fuel by 14.6%, motor fuel by 8.2%, electricity charges by 1.37%, transport fares by 22% ,and postal charges by 20%.

Weekly SPI

According to the PBS, the Sensitive Price Index for the week ended on 31st August, 2023 increased by 0.54%.

Major increase is observed in the prices of food items, sugar (7.17%), Gur (2.11%), pulse Masoor (1.50%), and pulse Mash (1.39%).

Non-food items: gents sandal (15.01%), LPG (3.92%), lawn printed (2.36%), long cloth (2.22%), and Match Box (1.07%).

On the other hand, a decrease is observed in the prices of tomatoes (3.36%), bananas (2.49%), onions (2.01%), chicken (1.23%), garlic (0.58%), vegetable Ghee 2.5 kg (0.31%), vegetable Ghee 1 Kg (0.19%) and mustard oil (0.04%).

During the week, out of 51 items, prices of 20 (39.22%) items increased, 08 (15.68%) items decreased and 23 (45.10%) items remained stable.

The year-on-year trend depicts an increase of 24.39%, wheat flour (126.26%), gas charges for Q1 (108.38%), cigarettes (101.29%), sugar (94.06%), tea Lipton (93.94%), rice basmati broken (89.04%), chilies powder (86.05%), rice Irri-6/9 (81.82%), gur (67.02%), gents sponge chappal (58.05%), gent sandal (53.37%), salt powder (49.09%), bread (45.42%), and powdered milk (43.44%), while decrease is observed in the prices of onions (57.06%), tomatoes (48.77%), electricity for Q1 (21.96%) and pulse Masoor (9.04%).

 

Reporter Waqas Azeem and input from AFP