Spiralling inflation hits 48-year high

Inflation rate jumped to 48-year high in January due to a double-digit increase in cost of almost all essential goods, in what appears to be a prelude to what the nation will embrace because of record currency devaluation, higher taxes and electricity prices. The Consumer Price Index (CPI), the inflation monitor, rose by 27.6% in January compared to the same period last year, the Pakistan Bureau of Statistics (PBS) reported on Wednesday, beating the finance ministry’s forecast of 26% hike. It is the highest reading since May 1975 when the CPI hit 27.8%. However, the rate hike is in line with market expectations due to a major breakdown in supplies of goods. Around 9,000 containers of food items, raw materials and other imported goods have been stuck at ports due to shortage of foreign currency. Pakistan’s inflation rate is the 19th highest in the world, which may further pick up pace due to the rupee devaluation, hike in electricity tariff and imposition of more taxes to meet the conditions agreed with the International Monetary Fund (IMF). The rupee lost 16.4% of its value in the past five working days.