Saturday July 02, 2022

Inflation Rises to 14-year High of 21.3% in June

ISLAMABAD: The inflation rate in Pakistan spiked to 21.3% in June — the highest pace since 2008 —  because of exponential growth in the prices of petroleum products, the Pakistan Bureau of Statistics (PBS) reported.

On a month-on-month basis, inflation soared to a 30-year high as it clocked in at 6.3% in the last month of the fiscal year 2021-22, compared to an increase of 0.4% in the previous month and a decrease of 0.3% in May 2021.

According to the PBS, the CPI-based inflation rate jumped 19.8% in urban areas and 23.6% in villages and towns.

An analyst from Arif Habib Ltd, Sana Tawfiq, said that the inflation rate was “way above the market expectation.”

“An increase came on the back of three sectors — food, transport, and housing and electricity,” she said, identifying four major reasons behind the whopping increase:

  • Low-base effect;
  • Removal of subsidies on petroleum products;
  • Increase in electricity tariffs; and
  • Rising price of food items.

The analyst was of the view that the impact of a significant increase in the price of petroleum products as the coalition government rolled back the subsidies provided by the Imran Khan-led government was significantly reflected in June’s inflation rate.

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