Islamabad, January 1, 2024 – Pakistan is grappling with an alarming surge in inflation as the Consumer Price Index (CPI) records a staggering Year on Year (YoY) increase of 29.7 percent in December 2023.
The latest figures, released by the Pakistan Bureau of Statistics (PBS) on Monday, reveal a concerning upward trajectory in inflation, presenting challenges for the nation’s economic stability.
Breaking down the data, the CPI inflation General witnessed a YoY increase of 29.7 percent in December 2023, compared to 29.2 percent in the previous month and 24.5 percent in December 2022. On a month-on-month basis, there was an increase of 0.8 percent in December 2023, in contrast to a 2.7 percent increase in the preceding month and a 0.5 percent increase in December 2022.
The urban areas experienced a more pronounced impact, with CPI inflation Urban soaring to 30.9 percent YoY in December 2023, up from 30.4 percent in the previous month and 21.6 percent in December 2022. On a month-on-month basis, urban inflation increased by 0.7 percent in December 2023, compared to a significant 4.3 percent in the preceding month and a modest 0.3 percent in December 2022.
Similarly, in rural areas, CPI inflation Rural increased to 27.9 percent YoY in December 2023, marginally up from 27.5 percent in the previous month but significantly higher than 28.8 percent in December 2022. On a month-on-month basis, rural inflation recorded a 1.0 percent increase in December 2023, compared to 0.4 percent in the previous month and 0.7 percent in December 2022.
The Sensitive Price Indicator (SPI) inflation witnessed a YoY increase to 35.3 percent in December 2023, up from 30.6 percent a month earlier and 27.8 percent in December 2022. On a month-on-month basis, SPI inflation surged by 3.8 percent in December 2023, in contrast to a 3.3 percent increase in the preceding month and a mere 0.2 percent increase in December 2022.
Wholesale Price Index (WPI) inflation increased to 27.3 percent YoY in December 2023, slightly up from 26.4 percent in the previous month and 27.1 percent in December 2022. On a month-on-month basis, there was no change in WPI inflation in December 2023, compared to a 1.4 percent increase in the preceding month and a decrease of 0.7 percent in December 2022.
Delving into non-food non-energy measurements, the Urban sector’s inflation measured by this metric increased to 18.2 percent YoY in December 2023, down from 18.6 percent in the previous month but up from 14.7 percent in December 2022. On a month-on-month basis, it increased by 0.8 percent in December 2023, compared to 0.9 percent in the previous month and 1.2 percent in December 2022.
In the Rural sector, non-food non-energy inflation increased to 25.1 percent YoY in December 2023, down from 25.9 percent in the previous month but significantly higher than 19.0 percent in December 2022. On a month-on-month basis, it increased by 0.9 percent in December 2023, compared to 1.4 percent in the previous month and 1.5 percent in December 2022.
Measured by the 20 percent weighted trimmed mean, Urban inflation increased to 23.3 percent YoY in December 2023, up from 22.9 percent in the previous month and 19.4 percent in December 2022. On a month-on-month basis, it increased by 0.3 percent in December 2023, compared to 0.1 percent in the previous month and 0.8 percent in December 2022.
The 20 percent weighted trimmed mean for Rural inflation increased to 28.0 percent YoY in December 2023, slightly up from 27.9 percent in the previous month and significantly higher than 26.4 percent in December 2022. On a month-on-month basis, it increased to 0.7 percent in December 2023, compared to 0.5 percent in the previous month and 1.5 percent in December 2022.
This surge in inflation, across various metrics, underscores the economic challenges faced by Pakistan, raising concerns about the purchasing power of citizens and the broader impact on the economy. The government and economic policymakers are likely to face increased pressure to implement measures to curb inflation and stabilize the economy. As citizens brace themselves for the repercussions, the authorities must navigate a delicate balance between addressing inflationary pressures and fostering economic growth.
