KARACHI: Consumer price inflation in Pakistan surged to a record 35.37% in March 2023 compared with the corresponding month last earlier, the Bureau of Statistics said on Saturday.

March inflation number eclipsed February’s 31.5%, the bureau said, as food, beverage and transport prices surged up to 50% year-on-year.

According to Reuters, a spokesman at the statistics bureau said the inflation number was the highest ever year-on-year increase recorded by the bureau since monthly records began in the 1970s.

Month-on-month inflation was 3.72 percent, according to government data released Saturday, while the average inflation rate for the past year was 27.26 percent.

Pakistan’s inflation rate has hit a new record high, with prices of goods and services soaring amid a struggling economy and supply chain disruptions caused by the floods.

Experts attribute the spike in inflation to a number of factors, including the government’s monetary policy, which has increased the money supply and put pressure on prices.

Pakistan’s struggling economy has also contributed to the inflationary pressures. The country has faced a number of economic challenges, including a balance of payments crisis, rising debt levels, and a weak currency.

The government has taken steps to address these issues, such as securing loans from international lenders and implementing austerity measures, but the effects of these policies have been slow to materialize.

The high inflation rate has had a significant impact on Pakistani households, particularly those with lower incomes. The rising cost of basic necessities like food and fuel has led to increased financial strain and reduced purchasing power.

The government has attempted to mitigate the effects of inflation by providing subsidies and introducing price controls, but these measures have been criticized as ineffective and unsustainable.

On the economic front, IMF program remained stalled as the lender awaits guarantees of US$3bn from UAE and KSA.

As per the latest numbers, reserves held by the State Bank of Pakistan (SBP) decreased by US$354mn to US$4.2bn owing to external debt repayment, says Waqas Ghani at JS Global Capital, a Karachi based brokerage.

This decline came in after six consecutive weeks of increases which were mainly on back of commercial loans from China.

“Pakistan has again requested China to roll over a US$2bn loan which matured last week to help the country’s dwindling reserves situation, documentation of the loan has been completed as per finance ministry”.

The government has announced plans to invest in infrastructure and boost exports, which could help to stimulate economic growth and alleviate some of the inflationary pressures. However, it remains to be seen whether these measures will be sufficient to address the underlying causes of Pakistan’s high inflation rate.

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