In June 2022, Pakistan’s yearly inflation rate reached a 13-year high of 21.3 per cent, up from 9.7 per cent in June 2021 and 13.8 per cent in May 2022, according to the most recent data made public recently by the Pakistan Bureau of Statistics (PBS).
According to PBS, monthly CPI-based inflation rose by 6.3 per cent in June 2022 as opposed to a 0.4 per cent increase the month before and a 0.3 per cent decrease in June 2021.
Compared to increases of 14.1 per cent a month prior and 17.6 per cent a year prior, the Sensitive Price Index (SPI) inflation on a YoY basis increased by 21.7 per cent in June 2022. On a month-over-month basis, it increased by 6.2 per cent in June 2022 compared to a 0.6 per cent increase the previous month and a (-)0.4 per cent decrease in June 2021.
The Consumer Price Index (CPI) reached 21.3 per cent on a year-over-year (YoY) basis as Pakistan’s economy battles a widening current account deficit brought on by a high import bill, rising inflation has become a major concern.
In an effort to combat economic headwinds, the State Bank of Pakistan (SBP) increased the key interest rate by 150 basis points to 13.75 per cent earlier in May. At the time, the central bank predicted that as electricity and fuel subsidies are eliminated, inflation is likely to spike briefly, remain high through FY23, and then drop precipitously in FY24, according to Brecorder.
The SBP is currently scheduled to decide the key interest rate at its upcoming Monetary Policy Committee meeting on July 7.
On the other hand, the current administration increased the price of petroleum products in an effort to resurrect the International Monetary Fund (IMF) programme, which is anticipated to drive up inflation even further.
The government announced a late-night price increase for petroleum products on Thursday, raising the ex-depot price of gasoline to Rs248.74 per liter (after an increase of Rs14.85) and diesel to Rs276.54 (after a hike of Rs13.23).
CPI inflation in urban areas
In contrast, year-over-year CPI inflation in urban areas increased by 19.8 per cent in June 2022 as opposed to increases of 12.4 per cent in May 2022 and 9.6 per cent in June 2021.
In June 2022, it increased by 6.2 per cent month over month, compared to a 0.3 per cent increase the month before and a 0.4 per cent decline in June 2021.
CPI inflation in rural areas
In contrast to the previous month’s increase of 15.9 per cent and the increase of 9.7 per cent in June 2021, the CPI inflation rate in rural areas increased by 23.6 per cent on an annual basis in June 2022.
Comparing June 2022 to June 2021, it increased by 6.6 per cent month over month, compared to increases of 0.6 per cent and 0.1 per cent, respectively.
