ISLAMABAD - Inflation has broken all previous records after touching its highest ever 38 percent level in May 2023 mainly due to rising price level of food commodities, disruptions in supply chains, devaluation brought by the macro-economic imbalances and political uncertainty.
Inflation measured through consumer price indicator (CPI) has increased to 38 percent in May this year—highest level in the country’s history. Inflation has gone beyond the projections of the ministry of finance, which estimated CPI based inflation in the range of 34-36 percent for the month of May this year. “Inflationary pressure in May 2023 is expected to continue as observed in the month of April,” the ministry noted and mentioned potential reasons for the rising price level are flood damages, disruptions in supply chains, devaluation brought by the macro-economic imbalances and political uncertainty. Inflation has ballooned due to the economic policies of the incumbent government to revive the IMF’s programme by increasing electricity, gas and oil prices, announcing mini budgets and massive currency depreciation. However, the IMF’s programme has yet to revive.
According to the latest data of Pakistan Bureau of Statistics (PBS), the inflation on monthly basis has increased by 1.6 percent in May this year as against 2.4 percent in April. The CPI inflation Urban increased by 35.1 percent on a year-on-year basis in May 2023. Meanwhile the CPI inflation for Rural has enhanced by 42.2 percent. Meanwhile, it has increased by 29.16 percent in eleven months (July to May) of the current fiscal year. The Sensitive Price Index (SPI), which gauges rates of kitchen items on a weekly basis, increased by 32.8 percent. On a monthly basis, Wholesale Price Index (WPI) inflation on YoY basis increased by 33.93 percent in May 2023.
The break-up of inflation of 37.97 percent showed that food and non-alcoholic beverages prices increased by 48.65 percent last month. Similarly, health and education charges went up by 19.32 percent and 8.43 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 20.51 percent in the last month. Meanwhile, the prices of alcoholic beverages and tobacco went up by around 123.96 percent. Prices of clothing and footwear increased by 22.47 percent and furnishing and household equipment maintenance charges 43.46 percent. Recreational charges and those related to culture went up by 72.17 percent in the period under review, while amounts charged by restaurants and hotels by 42.34 percent in May 2023 as compared to the same month last year.
In urban areas, the food items which saw their prices increased during May 2023 included potatoes (17.22 percent), gur (15.73 percent), chicken (11.31 percent), eggs (7.1 percent), wheat flour (6.4 percent), readymade food (5.68 percent), sweetmeat (4.64 percent), meat (4.5 percent), pulse mash (3.65 percent), dessert preparation (3.13 percent), beans (2.91 percent), condiments and spices (2.52 percent), milk powder (2.38 percent) and rice (1.93 percent). In non-food commodities, prices of following commodities enhanced included accommodation services (22.84 percent), stationery (5.44 percent), text books (5.15 percent), washing soap/detergents/match box (4.29 percent), motor vehicle accessories (3.86 percent), plastic products (3.2 percent) and electricity charges (2.92 percent).
In urban areas, prices of following items were reduced onions (32.96 percent), tomatoes (28.89 percent), fresh vegetables (10.71 percent), fresh fruits (3.16 percent), sugar (2.77 percent), wheat (2.29 percent), fish (1.17 percent) and mustard oil (1.04 percent).
In rural areas, prices of following commodities increased including potatoes (25.3 percent), gur (12.7 percent), chicken (9.36 percent), milk powder (6.6 percent), eggs (6.58 percent), readymade food (4.97 percent), rice (4.86 percent), milk fresh (3.75 percent), pulse moong (3.64 percent), tea