Pakistan’s inflation rate, which was bailed out by the International Monetary Fund (IMF) due to economic difficulties, has soared back to the 30% range.
According to the Pakistani daily Don (DAWN) on the 3rd, the Pakistan National Statistical Office announced on the previous day that the Consumer Price Index (CPI) rose 31.4% from a year from a year ago.
Pakistan’s currency value fell sharply due to the currency crisis, import prices soared, and inflation hit an all-time high of 38% in May as agricultural prices rose sharply due to heavy floods last year.
However, the inflation rate also fell to the 20% level as it stabilized somewhat, receiving $3 billion (about 4.8 trillion won) in bailout support from the IMF in July.
However, as energy and fuel subsidies were reformed in accordance with the financial reform promise with the IMF, the price of gasoline, diesel, and electricity prices rose significantly, and the inflation rate rose back to 30%.
Pakistan’s Ministry of Finance predicted that such measures will lead to around 30% inflation this month, but that inflation will slow down as the exchange rate is stabilizing.
As prices soar, Pakistan’s central bank is also expected to raise its benchmark interest rate again.
Pakistan’s central bank raised its key interest rate by 1 percentage point in June from 21% to 22%, before freezing it in July and September.
Tahir Abbas, head of research at investment firm Arif Habib Limited, said, “The high inflation rate has some base effect,” adding, “As inflation is expected to ease to the mid-20% level in a few months, the figure should not have a significant impact on monetary policy.”
EJ SONG
US ASIA JOURNAL
