The inflation rate in Pakistan increased to 9 percent in September 2021 as a result of a considerable increase in the costs of food, power, and fuel products, exceeding both government and market predictions for a moderate rate of inflation in the following months.
In spite of the government’s efforts to protect itself by listing the pricing of items in other countries in the weakening Pakistani currency, the costs of commodities that have a direct impact on people’s everyday lives have continued to rise further.
On Friday, the Pakistan Bureau of Statistics (PBS) revealed that the Consumer Price Index (CPI)-based inflation rate increased to 9 percent for the third consecutive month as compared to the same month a year ago. It was the greatest rate of inflation in three months, according to the CPI.
According to the Ministry of Finance and market surveys, the inflation rate for September will be approximately 8.4 percent. September saw an increase in the month-on-month inflation rate to 2.1 percent compared to August, marking the highest level in 15 months.
According to the PBS, inflation has increased to 9.1 percent in urban regions and 8.8 percent in rural areas in recent months.
Food inflation soared to 10.8 percent in urban areas, while it stayed at the previous level of 9.1 percent in rural areas and small towns and villages.
Price increases for chicken, cooking oil, eggs, and wheat flour were all reported to have increased by over 45 percent in September compared to the same month the previous year, according to PBS. Egg rates were up by one-third and wheat flour prices were up by nearly 20 percent in September.
Wheat flour prices increased by 10% month on month, despite Finance Minister Shaukat Tarin’s vow to bring costs down to Rs55 per kilogram of wheat flour. The price of sugar has increased by more than 15% this year.
Although Prime Minister Imran Khan has made it clear that he wants to slow the rise in food prices, prices of staple foods have been rising by double-digit percentages for some time.
The increase came despite the sharpest decline in the value of the rupee in three months, which fell to Rs170.6 to the dollar on Friday, the lowest level in three months. A year ago, on May 3, the rupee was trading at Rs153.36 to the dollar, meaning it had lost Rs17.2 (or 11 percent) of its value in only four months.
The fall in the value of the rupee is driving up the price of every imported product, including wheat, sugar, cooking oil, crude oil, and raw materials for manufacturing plants and factories.
Tarin stated on Friday that Pakistan’s petrol costs were lower than those in the rest of the region and the rest of the world and that only 16 countries had lower pricing – all of which were oil producers themselves.
Using Pakistani currency, he was able to convert these prices. If the price of a liter of petrol in Pakistan were measured in Indian rupee-dollar parity, it would be $1.73, making it the most expensive in the region, compared to $1.4 per liter in India and $1.2 in Bangladesh.
In a similar vein, Pakistan’s per capita income is $1,540, whilst India’s is $1,947 and Bangladesh’s is $2,100, respectively.
The finance minister stated that the Covid-19 pandemic was having an impact on the prices of other important commodities all across the world, including the United States.
As a result of our transformation into a food importer, we have also been impacted by the situation. In only three years, we did not become a net food importer, but we have been dealing with the effects of shortcomings in the agricultural sector for the past thirty years,” stated the finance minister.
According to the PBS, the rate of non-food inflation jumped to 8.1 percent in urban areas and 8.5 percent in rural areas in September.
The average inflation rate for the period July to September grew to 8.6 percent, which is somewhat higher than the target rate. In metropolitan regions, the average inflation rate was 8.7 percent, while in rural areas, the average inflation rate was 8.4 percent.