Pakistan: Inflation reaches 31.6%, breaks 58-year record
What's the story
Pakistan's monthly inflation rose to a historic high of 31.6% in February, the Pakistan Bureau of Statistics (PBS) said. This marks the highest inflation reading recorded in the country since July 1965, when data-keeping began. At the time, the figures stood at over 29%. Currently, Pakistan is facing its worst economic crisis with prices soaring at the fastest pace ever.
Food-fuel
Food and transport prices up by 50%
With the inflation increasing, costs of food and non-alcoholic beverages, transport, alcoholic beverages, tobacco, and recreation and culture rose by 50%. The inflation is expected to increase even further, according to Pakistan's research firm Arif Habib Limited. Notably, the inflation rate remained above 20% from June 2022 to January 2023. However, Pakistan's Finance Ministry had forecast inflation in February to be around 30%.
Currency
Pakistani rupee touches record low against US dollar
Meanwhile, the Pakistani rupee hit a record low of 284 rupees per US dollar in local trading. It retraced some losses and closed at 279 rupees, Eikon data showed. Furthermore, the central bank on Thursday raised its key interest rate to 20%, a 27-year high, in an attempt to encourage the International Monetary Fund (IMF) to release the stalled funding of $1.1 billion.
IMF deal
Pakistan negotiating on $6.5 billion bailout package
The IMF officials visited Pakistan in January but departed without a deal after 10 days of talks, leaving Pakistan in dire need of finances. Negotiation talks later proceeded virtually to reach an agreement on a reform plan under the country's $6.5 billion bailout package signed with the IMF in 2019. It remains to be seen if the transaction will be completed.