Pakistan inflation hits 9.41 percent, highest in five years

 

ISLAMABAD: Pakistan’s consumer price inflation rose in March to its highest since November 2013, adding to economic headwinds besetting Prime Minister Imran Khan’s government.

Inflation rose to 9.41 percent year-on-year, up from 8.21 percent in February, Bureau of Statistics data showed on Monday, lifted by sharp rises in food, fuel and transport costs that have squeezed household budgets.

On Friday, the central bank lifted its key policy rate by 50 basis points to 10.75 percent, citing continuing inflationary pressures as well as high fiscal and current account deficits.

Consumer price inflation has jumped sharply over the past year, climbing from under 4 percent at the start of 2018.

Energy costs in particular have risen sharply, hit by a series of a devaluations of the rupee, and the government on Sunday announced a 6 rupee rise in petrol prices to 98.88 rupees a litre.

Pakistan’s currency has lost over a quarter of its value over the past year.

The country has been in talks with the International Monetary Fund on what would be its 13th bailout since the late 1980s.

Finance Minister Asad Umer told the Financial Times last week that an agreement was likely by May but officials say there are still wide differences over issues ranging from lifting exchange rate controls to bringing down the twin deficits.

Khan’s government has however secured loans over $8 billion from Saudi Arabia, United Arab Emirates (UAE) and China besides credit oil facility on deferred payment of $3 billion each from Riyadh and the UAE.

The Bureau of Statistics said food and beverage prices, which account for more than a third of the index makeup, rose 8.22 percent in March.

Housing, water, electricity gas and other fuels, which make up just under a third, rose 11.55 percent.

On a month-on-month basis, overall consumer prices increased by 1.42 percent