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Pakistan’s Inflation is Going to Shatter All Records

Inflation in Pakistan has recently been high, and it is expected to hit a record value in 2023. Because of the economic crisis, inflation in the nation is breaking all 50 years’ records. Moreover, Food, beverage, and transportation costs increased February’s price rises to the highest rate in Pakistan’s history, raising concerns among analysts that families will have to make decisions and sacrifices. 

Inflation Impact on Food Prices in Ramadan

In Pakistan, during the holy month of Ramadan, inflation can have a major impact on the cost of food. Similarly, Ramadan is a season when there is an increase in demand for several goods, including dates, fruits, and other traditional meals, and this can cause prices to rise as a result of supply and demand dynamics. However, the rate of inflation is estimated to be 33.6% in March 2023.

CPI-based Inflation Rates

The Consumer Price Index (CPI)-based inflation rate of Pakistan, which is still experiencing one of its biggest economic collapses, reached 31.5% in Feb 2023 compared to increases of 27.6% in January. With costs for food, beverages, and transportation rising by more than 45%, this was the greatest yearly rate in almost 50 years.

According to the state bank of Pakistan, in August 2021, the inflation rate was 9.1%. Furthermore, in August of the previous year, the inflation rate was 5.7%; this represented a huge increase.

In the previous month, the Pakistani rupee’s value dropped by 16.5%. In the interbank market, the Pakistani rupee plunged to a new record low of Rs290.18 compared to the US dollar as of Thursday afternoon, down 8.29% (or Rs24.07).

The inflation rate increased to a record-breaking 35.6% in rural areas while rising to 28.8% in urban areas. Rural communities were badly affected. In addition, the disruption of supply chains and insufficient restrictions were largely to blame for the sharp rise in the rate of food inflation.

Index-based Inflation Rise

  •       Transportation: 50.46%
  •       Alcohol and tobacco: 49.2%
  •       Sport and culture: 48.05%
  •       Food items that spoil quickly: 47.59%
  •       Non-perishable grocery items: 44.68 %
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