Pakistan’s inflation accelerated in January to its highest level in more than 48 years as a result of the cash-strapped government restricting imports, which left hundreds of containers of food, raw materials, and equipment stranded in ports.
According to statistics department data, consumer prices rose 27.55% from the previous year. In contrast, the median expectation of a gain in a Bloomberg survey was 25.9%, while the increase in December was 24.47%. Inflation is at its highest level since May 1975, according to data from the central bank.
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The most recent reading was made public a week after the State Bank of Pakistan raised its benchmark rate to the highest level in more than 24 years in an effort to stabilize an economy that is destabilizing due to a lack of resources, sky-high prices, and a funding shortage. The severe flooding of the previous year, which exacerbated the effects of political unrest and the war in Ukraine, contributed to the worsening of Pakistan’s problems.
Opinion of Bloomberg Economics:
As the administration struggles to fulfill the demands of the International Monetary Fund in order to obtain much-needed cash, it is likely to pick up speed. In the upcoming months, inflation is anticipated to rise as a result of a combination of rupee depreciation, rising gasoline prices, and rising energy costs. The government could enact new taxes if the IMF demands it. This will probably lead to an increase in interest rates at the State Bank of Pakistan.
—Economist Ankur Shukla of India
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A total of 6,000 containers, containing thousands of tonnes of supplies for poultry feed that earlier this year caused chicken prices to reach an all-time high, are stranded in ports. As a result of the delay, the government’s import restrictions, which have been in place due to financial concerns, are causing the inflation rate, which has been above 20% since June.