Pakistan is grappling with a significant surge in inflation as the Consumer Price Index (CPI) recorded a staggering 14.6 percent increase on a year-on-year (YoY) basis in January 2020.
The latest figures, released by the Pakistan Bureau of Statistics (PBS) on Saturday, indicate a concerning escalation in the inflation rate compared to the preceding months and the same period last year.
The headline inflation rate, a critical economic indicator, stood at 12.6 percent in December 2019, marking an alarming leap to 14.6 percent just one month later. In January 2019, the inflation rate was considerably lower at 5.6 percent, highlighting the rapidity of the recent surge.
On a month-on-month basis, the inflation rate increased by 2 percent in January 2020. This comes in stark contrast to the 0.3 percent decrease observed in the previous month and a 0.3 percent increase in January 2019. The month-on-month data offers insight into short-term trends, and the notable rise in January raises concerns about the impact on consumers and the broader economy.
Breaking down the inflation figures, the urban areas faced a substantial YoY increase, with the CPI inflation Urban climbing to 13.4 percent in January 2020. This is a noticeable jump from the 12.0 percent recorded in the previous month and the 6.2 percent reported in January 2019. On a month-on-month basis, urban inflation increased by 1.7 percent in January 2020, adding to the economic challenges experienced by urban consumers.
In rural areas, the YoY CPI inflation surged to 16.3 percent in January 2020, representing an increase from the 13.6 percent recorded in the previous month and the 4.6 percent reported in January 2019. On a month-on-month basis, rural inflation increased by 2.4 percent in January 2020, painting a challenging economic picture for Pakistan’s rural population.
The Sensitive Price Indicator (SPI), which gauges the inflation in essential commodities, recorded a YoY increase of 18.3 percent in January 2020. This is up from the 18.1 percent increase in the previous month and the 3.4 percent reported in January 2019. On a month-on-month basis, the SPI increased by 0.5 percent, underscoring the impact on essential goods and the cost of living.
The Wholesale Price Index (WPI) witnessed a significant YoY increase of 15.4 percent in January 2020, compared to 12.4 percent in the previous month and 12.6 percent in January 2019. On a month-on-month basis, WPI increased by 1.8 percent in January 2020, in contrast to the 0.3 percent decrease observed in the previous month and a 0.8 percent decrease in January 2019.
As Pakistan faces mounting economic pressures, policymakers will need to implement strategic measures to address the root causes of inflation. Balancing the need for economic growth with inflation control will be crucial to ensuring the stability of the country’s economy in the coming months.