News Desk
ISLAMABAD: Pakistan is experiencing the highest inflation rate after 1973-74 and 1974-75 when it recorded as 30% and 27% respectively, following the quantum devaluation of the rupee from 4.77 to rupees 11.00 per US dollar.
At that time, the primary objective was to divert sales from West Pakistan to international markets. The sales at the time of the agreement were destined for former east Pakistan.
The rate of inflation is also rising in most countries, at present, after an upsurge in the prices of international commodities, especially energy due to the Russia-Ukraine war. The aftereffects of Covid-19 on the international market are also a major cause.
But, analysts observe, Pakistan is witnessing relatively high inflation. It has the sixth-highest rate of inflation in Asia.
The massive inflation is amply demonstrated by the quarterly average inflation rates in the country in 2022.
Quantum jump in core rate of inflation
The rise in CPI in the first quarter of 2022 was a moderate 12.6 percent, which has gone up to 25 percent in the last quarter. The same quantum jump is witnessed in food prices and the core rate of inflation.
There are several causes of the successively higher quarterly inflation rate including the continuous process of rupee depreciation throughout 2022, which is 28%. Secondly, the supply shortages in basic food items that emerged after the floods are raising prices.
The prices of wheat flour, chicken, rice, pulses, and eggs have risen by 41 percent, 44 percent, 47 percent, 41 percent, and 54 percent respectively.
Overall, the food items’ contribution to inflation is 41 percent.
