Pakistan witnessed a significant surge in headline inflation as the Consumer Price Index (CPI) reached an unprecedented all-time high of 38% in May 2023.
The staggering increase in food prices has been identified as the primary driver of this inflationary pressure. Analysts at Arif Habib Limited have labeled this monthly year-on-year inflation rate as the highest ever recorded since July 1965.
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The Pakistan Bureau of Statistics (PBS) released the latest inflation data, indicating that the CPI inflation rate increased to 38.0% on a year-on-year basis in May 2023. This marked an upturn from the previous month’s 36.4% and a significant surge from May 2022’s 13.8%. On a month-on-month basis, inflation rose to 1.6% in May 2023, compared to 2.4% in the previous month and 0.4% in May 2022.
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CPI inflation in urban areas experienced a rise of 35.1% on a year-on-year basis in May 2023, up from 33.5% in the previous month and 12.4% in May 2022. On a month-on-month basis, it increased to 1.5% in May 2023, compared to 2.0% in the previous month and 0.3% in May 2022. In rural areas, CPI inflation surged to 42.2% year-on-year in May 2023, compared to 40.7% in the previous month and 15.9% in May 2022. On a month-on-month basis, it rose to 1.7% in May 2023, compared to 3.0% in the previous month and 0.6% in May 2022.
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The Special Price Index (SPI) inflation rate increased to 43.0% year-on-year in May 2023, compared to 42.1% in the previous month and 14.1% in May 2022. On a month-on-month basis, SPI inflation rose by 1.3% in May 2023, compared to 2.7% in the previous month and 0.6% in May 2022. The Wholesale Price Index (WPI) inflation rate increased to 32.8% year-on-year in May 2023, compared to 33.4% in the previous month and 29.6% in May 2022. On a month-on-month basis, WPI inflation rose by 1.0% in May 2023, compared to 0.1% in the previous month and 1.4% in May 2022.
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When measured by non-food non-energy indicators, urban inflation increased to 20.0% year-on-year in May 2023, compared to 19.5% in the previous month and 9.7% in May 2022. On a month-on-month basis, it rose by 1.2% in May 2023, compared to 1.8% in the previous month and 0.7% in May 2022. Similarly, rural inflation measured by non-food non-energy indicators rose to 26.9% year-on-year in May 2023, compared to 24.9% in the previous month and 11.5% in May 2022.
