Ahmed Mukhtar Naqshbandi
ISLAMABAD: Pakistan’s Consumer Price Index (CPI)-based inflation reached 27.6 percent on year-on-year (YoY) basis in January 2023 compared to a surge of 24.5 percent last month and 13 percent in January 2022.
According to the Monthly Economic Update & Outlook January 2023, food inflation was the main driver behind the latest hike, the highest since 27.8 percent in May 1975. It surged from 162.23 in January 2022 to 231.89 in January 2023, an increase of almost 43 percent.
The inflation rate is likely to increase further due to the impact of the recent rupee depreciation and hike in the prices of petroleum products.
The Finance Division had predicted inflation in the range of 24 to 26 percent in January 2023 on YoY basis. It expected inflationary pressure in the country to decrease gradually following flood-led damages that disrupted the supply chain of essential items.
Urban inflation
CPI-based inflation in urban areas surged to 24.4 percent on YoY basis in January compared to an increase of 21.6 percent last month and 13 percent in January 2022.
On a month-on-month (MoM) basis, it increased to 2.4 percent in January 2023 compared to a surge of 0.3 percent last month and a surge of 0.1 percent in January 2022.
Rural inflation
Meanwhile, CPI-based inflation in rural areas surged to 32.3 percent on a YoY basis in January 2023 compared to a surge of 28.8 percent last month and 12.9 percent in January 2022.
On a MoM basis, it increased to 3.6 percent in January 2023 compared to a surge of 0.7 percent last month and a surge of 0.9 percent in January 2022.
