Pakistan's consumer price index (CPI) jumped 31.5% in February year-on-year, the statistics bureau said on Wednesday, the highest annual rate in nearly 50 years, as prices of food, beverage and transportation surged more than 45%.
"February 2023 31.5% is the highest since 1974. The yearly average inflation for the financial year 1973-1974 was 32.78%," a spokesman for the Pakistan Bureau of Statistics told Reuters.
Prices were up 4.3% in February from the previous month, the bureau said in a statement. In January, the CPI was up 27.55% year-on-year.
Food and non alcoholic beverage prices rose by 45.07% over last year. Alchoholic beverages and tobacco prices jumped 47.59% due to an increased tax on cigarettes.
In February, the government passed a supplementary finance that raised the goods and services tax to 18% from 17% to help raise 170 billion rupees ($639 million) in extra revenue for the fiscal year through July.
The government is undertaking belt tightening, aims to increase revenues though taxes, and has also allowed the rupee to depreciate as it thrashes out a deal with the International Monetary Fund (IMF) to secure more than $1 billion in funding.
Devastating floods last year compounded economic difficulties.
"Inflation is expected to continue rising in the months ahead as IMF-mandated structural adjustments and currency devaluation filter through the supply chain," said Mustafa Pasha, chief investment officer at Lakson Investments.
Core inflation increased 17.1% and 21.5% year-on-year for urban and rural centres, respectively.
"Core inflation is something the central bank will need to keep an eye on when deciding the quantum of increase for the policy rate," Pasha said.
