January’s headline inflation mounts to the highest level since 1975

ISLAMABAD: Inflation in Pakistan in the month of January 2023 mounted to the highest level since 1975. The Federal Bureau of Statistics today reported 27.6% inflation in the month of January.

According to the FBS, headline inflation increased to 27.6% in January this year compared to 13% in January 2022.

The headline inflation last month was the highest since May 1975, when it surged to 27.77%.

The food inflation in rural and urban areas expanded by 45.2% and 39%, on yearly basis, respectively last month in comparison with only 11.8% and 13.3% inflation respectively.

As the government has increased prices of petroleum products, gas, and electricity tariffs, the headline inflation in Feb 2023 is bound to cross 35%. The government has increased petrol/diesel prices by Rs35/liter, while the LPG price had also been raised by Rs60/kg.

Additionally, hikes in the natural gas and electricity tariffs would, indeed, add fuel to fire and ignite a new wave of price-hike in the country from February. Rupee depreciation to 270 against the US dollar last month is also bound to put more weight on inflation.

Delay in the release of stuck-up containers at the Karachi ports has triggered inflation nationwide.

The Wholesale Price Index (WPI) also expanded sharply by 28.53% in January as against 24% in the same month last year.

According to PBS, the overall inflation rate recorded an increase in both the urban and rural areas in Pakistan.

The inflation in urban areas increased to 24.4% in January over the same month last year while the rural areas recorded 32.3% inflation last month. In January 2022, the inflation in urban areas stood at only 13% while 12.9% was recorded in rural areas.

The non-food inflation rate was recorded at 15.6% in urban areas and 20.9% in rural areas compared to 12.8% and 13.9% in the same month of last year.