ISLAMABAD: According to official figures released on Thursday, consumer inflation soared to 38% in May, the largest annual increase in prices ever, primarily due to soaring prices for food, housing, utilities, and transportation.
Inflation for this fiscal year has averaged 29.2 percent, according to the Pakistan Bureau of Statistics, while prices for non-perishable groceries and transportation have increased by more than 50 percent since May 2022.
The May number came as political unrest continued to engulf the nation and topped the finance ministry’s prediction of 34-36 percent for the month.
The government’s refusal to make IMF funds available, years of financial mismanagement, and currency depreciation have all contributed to the government’s failure to raise prices annually to such record levels.
CPI index reaches highest-ever figure of 38 percent, surpassing expectations of the government.
In May, compared to the same month a year prior, the average cost of a 20 kg bag of wheat flour more than doubled to almost Rs2,700, according to official data.
The cost of a kilogramme of live chicken increased by 38.6% to Rs435; a litre of milk increased by 41% to Rs170; and a dozen eggs increased by 85% to Rs280. Vegetables and pulses have also increased in price.
According to Mohammad Sohail, a financier in Karachi, “this level of inflation badly affects poor and middle-class families of the country, whose income is evaporating with each percentage point,” according to AFP.
However, a high-base effect means that monthly inflation, as measured by a basket of goods and services known as the Consumer Price Index (CPI), is anticipated to decline from June.
Since the administration implemented difficult measures as part of the fiscal adjustments required by the International Monetary Fund to release frozen money, it has been climbing.
In January, it has remained above 20 percent since June of last year. This increased to 31.6 percent in February, 35 percent in March, 36.4 percent in April, and now 37.97 percent in May. In May 2022, the reading was 13.8 percent.
Inflation, however, decreased from 2.4 percent in April to 1.6 percent in May.
Rural areas had 42.2 percent annual inflation in May compared to urban areas’ 35.1%. For the month, food inflation in urban and rural areas was 48.1 percent and 52.4 percent, respectively, while non-food inflation was 26.6 percent in urban and 32.5 percent in rural areas.
Inflation rates that do not include food and energy were 20 percent in urban regions and 26.9 percent in rural areas.
Cigarettes (148.33 percent), tea (112.18 percent), potatoes (108.2 percent), wheat flour (99 percent), wheat (94.8 percent), and eggs (90.3 percent) were the food items in urban areas whose costs increased the greatest in May compared to the same month last year.
Textbooks (113.98 percent), stationery (79.38 percent), motor fuels (69.9 percent), washing soap/detergents/matchbox (63.7 percent), gas prices (62.8 percent), and electricity costs (59.28 percent) were among the non-food items whose prices increased the most.
In rural areas, the price increases were as follows: cigarettes (127.23 percent), potatoes (113.54 percent), tea (106.35 percent), wheat flour (100.5 percent), wheat (93.46 percent), and eggs (88.31 percent).
In rural areas, the prices of the following non-food products increased significantly: textbooks (129.44 percent), motor fuels (74.92 percent), washing soaps, detergents, and matchboxes (60.96 percent), and power costs (59.28 percent).
“Things are worsening”
The PTI slammed the administration for failing to rein in inflation. It is shameful that the regime does not put an end to fascism. In response to the 38 percent inflation rate, they detained former CM of Punjab Parvez Elahi. Absolutely absurd!” it wrote in a tweet.
The new inflation rate was much higher than Pakistan’s main trading partners, according to party leader Hammad Azhar. “For individuals who comprehend elementary economics or mathematics, that will inevitably increase pressure on our currency. Whatever extravagant fantasies [Finance Minister Ishaq] Dar sells to buy time, the situation is deteriorating, he tweeted.