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Pakistan's inflation soars to 47% fueled by high food prices

Business Desk |
Update: 2023-03-27 12:16:52
Pakistan's inflation soars to 47% fueled by high food prices [photo collected]

Crisis-hit Pakistan recorded a new high in inflation based on sensitive price indicator (SPI) as it went to around 47% year on year (YoY) the week ended March 22, 2023, according to Pakistan Bureau of Statistics (PBS) data. This came following a continued hike in prices of essential commodities.

Of the 51 items tracked, the prices of 26 items increased, 13 items decreased, whereas those of 13 items remained unchanged.

Items that have recorded a price high are onions (228.28%), cigarettes (165.88%), wheat flour (120.66%), gas charges for Q1 (108.38%), diesel (102.84%), tea lipton (94.60%), bananas (89.84%), rice basmati broken (81.22%), petrol (81.17%), eggs (79.56%), etc., as per a report published by pkrevenue. 

The report also stated that the country's foreign exchange reserves have risen to $10.14 billion as of the week ending on March 17, 2023. 

Currently, Pakistan is struggling with a significant shortage of foreign exchange to sustain its balance of payments due to the ongoing economic crisis and IMF loan delay. 

Both have been negotiating since early February on an agreement that would release USD 1.1 billion to the cash-strapped, nuclear-armed country of 220 million people, and it's supercritical for the liquidity-challenged country.

The Pakistani government has made various economic modifications including hikes in fuel prices, raising taxes, and others demanded by the financial body for loans. The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019 -- vital to Pakistan to avert defaulting on external payment obligations.

However, no funding has been granted to the cash-strapped country yet.

IMF has now asked Islamabad to provide external financing assurances before it takes the next step with Pakistan to release the bailout tranche, according to a report published by pkrevenue.

The financial body wants Pakistan to get the assurance of up to USD 7 billion to fund this fiscal year's balance of payments gap. Finance Minister Ishaq Dar has been saying it should be around USD 5 billion.


BDST: 1212 HRS, MAR 27, 2023

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