Inflation in Pakistan has jumped to 31.5% after an increase of 4.32% in February, according to state data published on Wednesday, as Islamabad continues to stare down IMF negotiators withholding a crucial bailout.
Year-on-year inflation for February is the highest in decades, while transport and perishable food costs rose by around half as a cost-of-living crisis continues to bite.
The average inflation in the eight months of the ongoing fiscal year was a record 26.19%.
“The 30% figure is where families will have to make choices and sacrifices,” analyst Torek Farhadi told AFP.
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As per the Pakistan Bureau of Statistics, the price of chicken in February increased by 19.8%, cooking oil 17.2%, ghee 16.5%, fruits 15.1%, vegetables 14%, and cigarettes 15.6%.
In one month, the prices of gram and gram flour increased by 11%, daal maash 10.3%, rice by 9.5%, potato by 4.1% and milk by 2.2%.
Gas became expensive by 62.8% and petroleum products by 35%.
However, in the same month, the price of onion fell by 17%, tomatoes by 11%, flour 3.7%, wheat and eggs 3.2%.
Since February 2022, however, the price of onion has increased by 416%, chicken 96%, eggs by 78% and rice by 70%.
Chickpeas have become costlier by 65%, cigarettes 60%, chickpeas and groundnut pulses 56%, daal maash 50.7% and edible oil by 50.6650%.
During the previous year, transport fares increased by 33%.
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‘Brink of collapse’
Years of financial mismanagement and political instability have pushed Pakistan’s economy to the brink of collapse, exacerbated by a global energy crisis and devastating floods that submerged a third of the country in 2022.
Forex reserves have dwindled to just $3.25 billion – enough for around three weeks of imports – paralyzing supply chains and causing widespread factory closures.
To pull the country out of its spiral, Prime Minister Shehbaz Sharif is battling to revive the next tranche of a $6.5 billion loan deal sketched with the International Monetary Fund in 2019.
However, the global lender is demanding stringent reforms, including tax rises and subsidy slashing, likely to rile voters ahead of a general election due no later than October.
Last month, IMF negotiators flew to Pakistan for a 10-day visit, but went back to the US without sealing a deal.
Also Read: Talks between Pakistan, IMF end sans any deal announcement
Islamabad insisted the two sides were on the brink of hammering out terms, but the loan has yet to be unlocked.
“The average people pay the price for the packages that the big boys negotiate,” Farhadi said.
Analysts say inflation is expected to rise even after a deal has been reached.