Pakistan inflation quickens to 13per cent in January

Islamabad, Feb 1 (Reuters) – Pakistan’s consumer price index (CPI) rose 13per cent in January from a year earlier, the official statistics bureau said on Tuesday, the highest in two years.

In December, the inflation figure was 12.3per cent, the Pakistan Bureau of Statistics said in a news release.

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The country’s central bank paused monetary tightening last week, saying inflation momentum had slowed and fiscal tightening by the government would also have an effect on rising prices.

The central bank had increased the main policy rate by 275 basis points since September in the face of accelerating inflation but last week said it would hold the rate to see the effects its earlier measures had on rising prices.

The next monetary policy announcement is expected in March.

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Compared to December 2021, CPI rose 0.4per cent in January, the statistics bureau statement said.

The increase in CPI compared to last January was led foremost by electricity costs, which went up by 56.20per cent year-on-year, and cooking oils, which rose 50.33per cent.

Compared to December 2021, however, electricity prices fell in January by 2.52per cent, the statistics bureau said.

Rising fuel and electricity costs have put increasing pressure on the government of Prime Minister Imran Khan.

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The government last month passed a mid-year budget increasing taxes in a bid to control the fiscal deficit – a move meant to improve chances of a successful review of its International Monetary Fund programme.

The lender’s board is expected to meet this week to review country’s reforms progress and economic targets, Pakistan’s finance minister said.

Pakistan entered the three-year $6 billion IMF programme in 2019. A successful review would release $1 billion to the country.

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Source: NewsAsia