Pakistan’s headline inflation stood at 27.4% on a year-on-year basis in August, the Pakistan Bureau of Statistics (PBS) said on Friday. It was up 1.7 per cent on a month-on-month basis.

In June, the Consumer Price Index (CPI) rise was 28.3% year-on-year, coming off a record 38% in May.

Economic stabilisation is a top challenge for the South Asian nation as it embarks on a narrow recovery path after a $3 billion bailout from the International Monetary Fund (IMF) averted a sovereign debt default.

Economic reforms have already fuelled record inflation and interest rates, and all-time lows for the rupee.

Read: Food items get more expensive pushing up SPI increases by 0.69%

Pakistan raised petrol and diesel prices to a record high on Friday, with petrol prices rising Rs14.9 to Rs305.4, and diesel prices rising Rs18.4 to Rs311.8.

The CPI-based reading for August was also the lowest in 2023.

Many experts were of the view that inflation would go higher in the coming months, owing to the fall of the rupee against the dollar, high energy tariffs, and record hikes in fuel prices.

The State Bank of Pakistan is set to hold its Monetary Policy Committee meeting on September 14 to decide the key policy rate, which currently stands at a record 22%. The committee will take stock of the economic developments and take appropriate decisions in the matter, the central bank said in a statement.

(With input from Reuters)