Inflation sets another record, hits 35.4% in March

Overall inflation in urban and rural areas increased to 33 per cent and 38.9 per cent year-on-year, respectively.


April 3, 2023

ISLAMABAD – Consumer inflation raced to 35.4 per cent in March, the highest annual rise in prices on record, driven mainly by skyrocketing costs of food, electricity, beverage, and transport, official data showed on Saturday.

Poor citizens are already feeling the brunt of such high inflation, which has become unrelenting on the back of a messy cocktail of factors like political instability, years of financial mismanagement, the rupee’s depreciation, and as the government scrambled to meet IMF conditions to unlock a desperately needed bailout.

At least 20 people have been killed since the start of Ramazan in crowd crushes at food distribution centres across the country. “The way inflation is rising, I believe a famine-like situation has been simmering,” Shahida Wizarat, a Karachi-based analyst, told AFP.

The March inflation number was the highest annual rate since available data, i.e. July 1965, according to the research firm Arif Habib Ltd, and is expected to rise in the coming months.

Highest annual rise in prices driven mainly by skyrocketing costs of food, electricity, beverages and transport

A spokesperson for the Pakistan Bureau of Statistics confirmed that “this is the highest ever inflation recorded in the data we have”, Reuters reported.

Monthly inflation — measured by a basket of products and services called the Consu­mer Price Index (CPI) — stayed above 20pc for eight months from June to January. It then hit 31.6pc in February and has now crossed 35pc. The reading was 12.7pc in March last year.

However, when compared to the previous month, inflation slightly slowed but was still high at 3.7pc in March, data showed. Higher prices of food, cooking oil and electricity pushed up the index.

The goods and services in the CPI basket are divided into 12 major components with different weights. Of them, costs in three categories — food and non-alcoholic beverages, transport, and recreation and culture — jumped by around half when compared to March last year.

The index for the “alcoholic beverages and tobacco” category saw the highest annual jump, at 140pc, though its weight in the CPI is 1pc compared to food’s 35pc.

Inflation sets another record, hits 35.4% in March

Source: PBS

Annual food inflation in March was 47.1pc and 50.2pc for urban and rural areas, respectively, data said. Core inflation, which strips out food and energy, stood at 18.6pc in urban areas and 23.1pc in rural areas.

Overall inflation in urban and rural areas increased to 33pc and 38.9pc year-on-year, respectively.

With the latest increase in CPI, average inflation has reached 27.3pc this fiscal year compared to 10.8pc in the previous year.

Main contributors

In the food group, the items whose prices increased the most in March compared to last year were onions (257.6pc), tea (105.19pc), wheat (94pc), eggs (83.6pc), rice (82.4pc), wheat flour (70pc), gram whole (65pc), pulse moong (58.3pc), besan (56pc), wheat products (54pc), pulse gram (53.8pc), pulse mash (53.5pc), cooking oil (53.5pc), fresh fruits (51.3pc), dry fruits (48pc), etc.

In the non-food category, the items whose prices saw the highest increase were textbooks (74pc), motor fuel (71.6pc), stationery (67pc), gas charges (62.8pc), motor vehicles (45.5pc), household equipment (42pc), and others.

When compared to the previous month, the price of cigarettes saw the highest jump (70.34pc) in the food group, followed by tea (28.46pc), fresh fruits (20.04pc), tomatoes (13.17pc), sugar (12.49pc), beverages (11.76pc), potatoes (11.26pc), wheat (8.29pc), wheat flour (7.84pc), cooking oil (7.04pc), fresh vegetables (6.22pc), beans (5.43pc), vegetable ghee (5.05pc), fresh milk (4.50pc), rice (3.30pc), etc.

In the non-food category, the products and services whose prices rose the most were cotton cloth (13.3pc), household equipment (10.56pc), motor vehicles (6.73pc), electricity charges (6.21pc), marriage hall charges (5.53pc), stationery (5.37pc), construction wage rates (3.75pc), transport services (3.65pc), and motor vehicle accessories (3.28pc).

Published in Dawn, April 2nd, 2023

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