Inflation in Pakistan has reached new heights as it rose to a record 38% on a year-on-year basis in May 2023, the Pakistan Bureau of Statistics confirmed Thursday.

The consumer price index (CPI)-based inflation reading in Pakistan stood at 36.4% in April 2023. On a month-on-month basis, inflation in Pakistan rose 1.6% in May, SBS said.

May’s inflation number “takes 11MFY23 average inflation to 29.2% compared to 11.3% in 11MFY22”, Arif Habib Limited said.

The breakup of components suggested that food inflation in urban areas increased by 48.1% in May 2023 compared to May 2022. The rural areas fared no better with 52.4% price rise on a year-on-year basis.

Ismail Iqbal Securities Head of Research Fahad Rauf said the high inflation reading was led primarily by a spike in food prices.

“In the food group, the chicken price surged by a large margin which drove CPI in this group upward,” he was quoted by Business Recorder. “Secondly, the footwear segment saw a modest increase in prices.”

This is the peak of inflation and the number will fall to 30% for June 2023, he said.

The inflation number is higher than the prediction of the Ministry of Finance of 34-36%. In its Monthly Economic Outlook for May, the Ministry of Finance stated that “the inflation for the month of May 2023 may remain in the range of 34-36%”.

It added that improvement in the global supply chain will ease out domestic prices in the coming months.