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Alarms raised as food prices push CPI inflation to record 38% in May

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1 year ago

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  • Inflation clocks in 1.6% on month-on-month basis.
  • AHL says reading takes 11MFY23 average inflation to 29.2%.
  • Pakistan’s inflation outstrips Sri Lanka’s annual rate of 25.2% in May.

The consumer price index (CPI)-based inflation rate in Pakistan surged to a record 38% on a year-on-year (YoY) basis in May 2023, the highest since July 1965 — barring a few years in between due to the non-availability of monthly records).

Pakistan Bureau of Statistics (PBS) data showed that CPI-based inflation hit 36.4% in April 2023, while it increased 1.6% in the month of May month-on-month (MoM).

“This reading takes 11MFY23 average inflation to 29.2% compared to 11.3% in 11MFY22,” brokerage Arif Habib Limited noted in a report.

The food inflation in urban areas jumped by a whopping 48.1% in May 2023 compared to May 2022, while the rural areas saw a 52.4% increase in consumer prices year-on-year.

Arif Habib Limited Economist Sana Tawfiq, while noting that inflation reached record levels, stated that on a month-on-month (MoM) basis “inflation clocked-in higher, up 1.6%”. 

The analyst told Geo.tv that the MoM jump was primarily due to high food prices, household items and clothing. 

She added that core inflation continues to rise and crossed 23% YoY during the outgoing month.  

“We expect headline numbers to recede from June onwards with base-effect kicking in. However, domestic food and energy prices as well as further currency devaluation remain key risks to the overall inflation,” Tawfiq warned. 

The latest 38% rise tops that of Sri Lanka, which posted annual inflation of 25.2% in May.

Inflation has been on an upward trend since early this year after the government took painful measures as part of fiscal adjustments demanded by the International Monetary Fund (IMF) to unlock stalled funding, which still has not been disbursed.

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Business

Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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2 days ago

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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3 days ago

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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