Inflation hits double digits in Pakistan after six years

The economic situation in Pakistan seems to be getting all the more worse day by day as revealed by the new inflation figures released by the Pakistan Bureau of Statistics.

Inflation, measured by the Consumer Price Index (CPI), rose to 10.34 per cent in July this year from 8.9 per cent the preceding month. During the same month last year, inflation stood at 5.84 per cent, reports Dawn news.

The last time inflation entered the double digits was in November 2013 and recorded at 10.9 per cent.

The upward adjustments in prices of petroleum products over the past few months, followed by an increase in electricity and gas tariffs fuelled the total inflation.

The government had introduced certain tax measures, the cumulative impact of which dragged the overall inflation to double digits.

The rupee's depreciation also led to an increase in prices of imported consumer and non-consumer items, especially raw material used in manufacturing of industrial products, over the past few months.

The Imran Khan-led government has projected an inflation target of 11 per cent to 13 per cent for the fiscal year 2019-20, compared to 7.3 per cent recorded in 2018-19.

Price levels, perked up in the first month of the current fiscal year, appeared to have been driven by a spike in non-food inflation in July, reports Dawn News.

The CPI tracks the prices of around 480 commodities every month in urban centres across the country.

The food inflation was up 9.2 per cent on an annual basis, but surged 1.5 per cent on a monthly basis. Prices of non-perishable food items rose by 7.85 per cent and those of perishable products by 8.06 per cent in July.

On the other hand, non-food inflation increased 11.1 per cent on a yearly basis and 2.8 per cent on a monthly basis.

On July 16, the State Bank of Pakistan has raised its main policy rate by 100 basis points to 13.25 per cent, citing increased inflationary pressures and a likely near-term rise in prices from higher utility costs.

Average inflation measured by the Sensitive Price Index crawled up 12.16 per cent in July as against 3.58 per cent the previous year, while the Wholesale Price Index was up 13.46 per cent, compared to 10.50 per cent  in 2018-19.