Islamabad, July 3, 2023: Pakistan’s headline inflation reached 29.4 percent in June 2023, marking a substantial increase compared to the previous month, according to official data released by the Pakistan Bureau of Statistics (PBS) on Monday.
This surge in inflation has raised concerns among policymakers and the general public about the country’s economic stability.
The Consumer Price Index (CPI) based inflation, which serves as a key measure of inflation, rose by 29.4 percent year-on-year in June 2023, compared to a 38.0 percent increase in the previous month and a 21.3 percent increase in June 2022. On a month-on-month basis, the CPI inflation decreased slightly to 0.3 percent in June 2023, in contrast to a 1.6 percent increase in the previous month and a significant 6.3 percent increase in June 2022.
Breaking down the inflation data, the CPI inflation in urban areas rose to 27.3 percent year-on-year in June 2023, witnessing a decrease from the 35.1 percent increase in the previous month. In rural areas, the CPI inflation surged to 32.4 percent year-on-year in June 2023, after a sharp increase of 42.2 percent in the previous month. On a month-on-month basis, urban CPI inflation in June 2023 rose by 0.1 percent, while rural CPI inflation decreased slightly by 0.8 percent.
Another important measure, the Sensitive Price Indicator (SPI) inflation, showed a rise of 34.9 percent year-on-year in June 2023, compared to a 43.0 percent increase in the previous month. On a month-on-month basis, the SPI inflation increased by 0.2 percent in June 2023, highlighting a deceleration from the 1.3 percent increase in the previous month.
The Wholesale Price Index (WPI) inflation, which measures the average change in prices received by domestic producers, rose by 22.4 percent year-on-year in June 2023. This represents a slowdown from the 32.8 percent increase in the previous month and the 38.9 percent increase in June 2022. On a month-on-month basis, the WPI inflation experienced a marginal decrease of 0.3 percent in June 2023.
Examining core inflation, which excludes the volatile food and energy components, the non-food non-energy (NFNE) urban core inflation increased by 18.5 percent year-on-year in June 2023. This demonstrates a slight decrease from the 20.0 percent increase in the previous month but remains higher than the 11.5 percent increase recorded in June 2022. On a month-on-month basis, NFNE urban core inflation increased by 0.7 percent in June 2023.
Similarly, the NFNE rural core inflation rose to 25.2 percent year-on-year in June 2023, indicating a slight decrease from the 26.9 percent increase in the previous month. However, it still remained significantly higher than the 13.6 percent increase observed in June 2022. On a month-on-month basis, NFNE rural core inflation increased by 0.9 percent in June 2023.
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