Pakistan Inflation Hits 47-Year High Before Full Impact of Flood
Pakistan’s inflation accelerated for a sixth straight month to hit a fresh record in August, with the deadly floods risk jolting prices further.
(Bloomberg) -- Pakistan’s inflation accelerated for a sixth straight month to hit a fresh record in August, with the deadly floods risk jolting prices further.
Consumer prices rose 27.26% last month from a year earlier, according to data released by the government Thursday. That compares with a median estimate for a 26.6% rise in a Bloomberg survey of economists and a 24.93% jump in July. Pakistan’s inflation is the highest since May 1975, according to Zeeshan Azhar, analyst at Foundation Securities Pvt. citing central bank data.
The inflation print comes as the nation faces a looming food crisis after the catastrophic flooding in the latter part of August that would require more imports, adding pressure to its fragile finances. Rice and cotton crops were damaged along with vegetables like onions and tomatoes.
Deadly Floods Inundate Farms in Pakistan, Flushing Away Crops
Earlier this week, the South Asian nation secured $1.1 billion in loan from the International Monetary Fund to avert a default and pave the way for more funding.
Food inflation quickened to 29.5% year-on-year while transport surged 63%, according to data.
Meanwhile, further hikes in the fuel tax, as well as rise in power tariffs will continue to drive prices higher, according to Bloomberg Economics. Pakistan’s central bank kept rates steady last month after raising borrowing cost by 525 basis points this year.
(Updates with details in the second and fifth paragraph)
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