From Zeeshan Mirza
KARACHI: Pakistan’s annual inflation rose to 37.97 per cent year-on-year in May, the statistics bureau said on Thursday, showing a continued uptick in the highest ever inflation in the country.
The reading is also higher than the finance ministry’s projection of 34-36pc for May, as stated in its monthly economic update and outlook, which said after hitting a peak this month, inflation would start descending owing to the ease in international commodity prices that would absorb the negative impact of currency depreciation.
The ministry attributed the potential reasons for the rising price levels to flood damages, disruptions in supply chains, devaluation brought by the macroeconomic imbalances and political uncertainty.
Previously, the highest ever percentage of year-on-year inflation was recorded in April at 36.4pc.
The month-on-month rise in May was 1.58pc, the bureau said in a press release, adding vegetables, pulses and chicken prices posted the biggest increases.
Inflation has been on an upward trend in Pakistan since early this year after the government took painful measures as part of the fiscal adjustments demanded by the International Monetary Fund (IMF) to unlock stalled funding, which still hasn’t been disbursed.
It is measured on the basis of a basket of products and services called the Consumer Price Index (CPI), in which items are divided into 12 major components with different weights.
According to data released by the statistics bureau today, the highest year-on-year increase was recorded in the categories of alcoholic beverages and tobacco (123.96pc), recreation and culture (72.17pc) and transport (52.92pc).
In the food group, items whose prices increased the most in May compared to last year were cigarettes, potatoes, wheat flour, tea, wheat and eggs and rice. In the non-food category, the items whose prices saw the highest increase were text books, stationery, motor fuels, washing soaps, detergents and match boxes.
The CPI recorded an increase of 35.09pc for urban areas on a year-on-year basis in May and 42.18pc for rural areas.
With the latest increase in CPI, average inflation has reached 29.16pc in 11 months (July to May) this fiscal year compared to 11.29pc in the previous year.
