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Saturday, June 3, 2023

Pakistan’s CPI inflation soars to 35.37% in March: report | World News

Of Pakistan Inflation has been accelerated by record high taxes and energy prices, suggesting further interest rate hikes may be needed.

According to Bloomberg Economics, rising inflation and tax hikes implemented to fulfill the terms of the International Monetary Fund’s aid are eating into consumers’ purchasing power. (Bloomberg)

Data released by the statistics department on Saturday showed that consumer prices rose 35.37 percent year-on-year. That compares with a median estimate in a Bloomberg survey of 34.8% growth and a 31.55% gain in February.

The latest data are likely to support the State Bank of Pakistan raising its target interest rate in a review scheduled for April 4, with only one of 14 economists polled now expecting a rate hike.

Read also | Pak inflation soars to 47%, base prices soar: report

The central bank sharply raised interest rates by 300 basis points to 20 percent last month to rein in soaring prices from a weak currency, as well as raise taxes and energy prices in a bid to secure a still-overhanging IMF bailout.

The IMF has asked the South Asian country to seek commitments from Saudi Arabia and the United Arab Emirates before resuming the bailout.

The data showed that transportation prices rose 54.94% in March, while food prices rose 47.15% year-on-year. The price of clothing, shoes and hats rose by 21.93%, and housing, utility bills rose by 17.49%.

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