Pakistan’s headline inflation accelerated to a record high level in January

Pakistan’s headline inflation has accelerated to a record high level in January 2023!

The average inflation rate for Jul-Jan FY23 clocked in at 25.4% amid supply constraints for food products and a significant surge in the price of petroleum products.

According to data released by the Pakistan Bureau of Statistics (PBS) on Wednesday, consumer prices rose 27.6% compared to 13% in the same month of last year.

This is the highest year-on-year inflation since May 1975 when the median rate clocked in at 27.77%.

The Wholesale Price Index (WPI) also rose sharply by 28.53% in January compared to 24% in the same month last year.

According to the PBS report, the overall inflation rate recorded an increase in both the urban and rural areas. The inflation rate in urban areas surged 24.4% in January and rural areas soared 32.3% over the same month of the last year.

In January 2022, the inflation rate in urban areas was 13% meanwhile, in rural areas it stood at 12.9%.

Meanwhile, the food inflation rate in villages and cities skyrocketed 45.2% and 39%, respectively, on a yearly basis. In January 2021, food inflation for villages and cities clocked in at 11.8% and 13.3%, respectively.

The non-food inflation rate was recorded at 15.6% in urban areas and 20.9% in rural areas compared to 12.8% and 13.9% in the same month last year.

Core inflation — calculated by excluding food and energy items — has risen to 15.4% in urban areas and 19.4% in rural areas during the month under review, the national data collecting agency reports.

In January, the food group saw a price increase of 15.17%, from the same month a year ago.

Within the food group, prices of non-perishable food items increased by 12.51% on an annualised basis meanwhile the prices of perishable goods surged by 2.66% year-on-year.

The inflation rate for the housing, water, electricity, gas, and fuel group — having one-fourth weight in the basket — increased by 1.84% (year-on-year) in the last month.

Average prices for the clothing and footwear group increased by 1.43% in January.

Prices related to transportation have increased by 2.53% (year-on-year).

On a month-on-month basis, the price of chicken skyrocketed by 24.62%, followed by a 16.47% surge in wheat price, a 14.16% surge in rice, and a nearly 10% increase in onion prices, according to PBS.

Furthermore, the prices of fresh fruits, eggs, pulses, and milk fresh recorded an increase within a range of 2-5% in the last month.

The average inflation rate for the first seven months (July – January) of the current fiscal year came in at 25.4%, according to PBS.