Pakistan’s inflation is Asia’s fastest, outpaces Sri Lanka | World news
Pakistan took the crown for Asia’s fastest inflation from Sri Lanka as a weak currency and rising food and energy prices brought price gains to a record in April.
Consumer prices rose 36.4% in April from a year earlier, the highest since 1964, according to data released by the statistics department on Tuesday. That compares with the median estimate for a 37.2% gain in a Bloomberg survey and a 35.4% increase in March.
The data showed that Pakistan’s inflation exceeded the price gains in Sri Lanka which softened to 35.3% in April and started to show signs of recovery from the economic crisis. The Pakistani rupee is one of the most active currencies in the world until 2023, depreciating 20% against the dollar, and making imported goods more expensive.
Transportation costs rose 56.8% while fast food inflation jumped 48.1% in April from a year earlier, the data showed. Clothing and footwear prices rose 21.6% and housing, water and electricity rose 16.9%.
Pakistan’s inflation is expected to rise further after authorities raised taxes and oil prices to meet IMF conditions for the revival of a $6.5 billion loan program.
The bills will be necessary to help Pakistan pay for essential imports like food and fuel and to avoid a default next month. However, the IMF is looking for financial guarantees before resuming aid.
To offset the price pressures, the State Bank of Pakistan raised its benchmark interest rate last month to 21% – the highest since the central bank’s data dating back to 1956. An additional increase could make borrowing costs high for the South Asian country struggling with a slow recovery after last year’s floods.
The bank’s next monetary policy review is due on June 12.
The high prices are adding further pressure to Prime Minister Shehbaz Sharif who is also grappling with a political crisis. His rival Imran Khan is seeking early elections and has threatened to return to street protests if his demands are not met.
