Pakistan: Inflation Goes Beyond Expectations

Web Desk — According to Pakistan’s statistics agency, the country’s consumer price inflation rate rose to 11.5% in November.

Business Recorder quoted analysts as saying that the November number was higher than expected.

The government and central bank continue to battle inflation, which has reached its highest level in 21 months. The figure also increased from 9.2% the previous month. During February 2020, the number stood at 12.40%, according to data provided by the Pakistan Bureau of Statistics (PBS).

This brings 5MFY22 inflation to 9.32% YoY, up from 8.76% in 5MFY21, according to a brokerage house note.

Due to surging price growth, the State Bank of Pakistan (SBP) increased rates by 150 basis points this month. The interest rate is now 8.75%, the highest level since April 2020.

Inflation has become a major headache for the government, which has also had to deal with falling rupees, widening current account deficits, and protests by opposition parties.

Due to delays in the announcement of the International Monetary Fund (IMF) agreement, the rupee hit its lowest level in history against the US dollar for the second time just in November alone.

Despite registering a slight gain on Tuesday, many economists believe the rupee’s downward slide is likely to continue, especially if international commodity prices rise.

A surge in balance-of-payments pressure has also widened Pakistan’s current account deficit to more than $1.6 billion in a month.