Food prices push April inflation to record high of 36.4pc

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The Pakistan Bureau of Statistics said on Tuesday that inflation rose to a record high of 36.4 per cent in the year to April driven mainly by food prices, the highest rate in South Asia and up from March’s 35.4pc.

Rural areas recorded food inflation of 40.2pc, the bureau told Reuters. Food inflation for both rural and urban areas reached 48.1pc, the highest since FY16 when the bureau started recording the categories separately.

Prices rose 2.4pc in April from March, the bureau said in a press release.

“The higher reading was expected over the hyperinflation in the food segment,” said Amreen Soorani, head of research at investment company JS Capital.

“While the trend may continue for a couple of months more, the base effect is likely to kick in from June 2023, slowing the pace.”

The finance ministry said headline inflation was expected to remain at elevated levels in the months to come, despite contractionary monetary policy by the central bank.

Pakistan has been in economic turmoil for months with an acute balance of payments crisis while talks with the International Monetary Fund (IMF) to secure $1.1 billion as part of a $6.5bn bailout have not been successful.

Measures have been taken to try to secure the funding, including removing caps on the exchange rate, resulting in a depreciating currency, increasing taxes, removing subsidies and raising key interest rates to a record high of 21pc.

The finance ministry said the successful completion of talks with the IMF will eventually attract more capital inflows, stabilise the exchange rate and alleviate inflationary pressures.

Persistently high inflation has resulted in major lifestyle and consumption changes, with a greater number of people seeking help.

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