The annual Consumer Price Index-based inflation has soared to 31.5% on a year-on-year basis in February 2023 – the highest in Pakistan’s history. February 2022 clocked in at 12.2%.

On a month-on-month basis data released by the Pakistan Bureau of Statistics (PBS) showed a 4.3% increase as compared to January 2023 which was at 27.6%.

At 31.5%, this is the highest YoY inflation since data became available (July 1965), according to brokerage house Arif Habib Limited.

The latest reading takes 8MFY23 average inflation to 26.2% as compared to 10.5% recorded in 8MFY22, said Topline Securities.

Earlier, Ismail Iqbal Securities Limited had predicted that it could breach almost a 50-year record of 29.3% witnessed in April 1975.

“It is not likely to be the peak as most of the impact of recent sharp currency depreciation, energy price adjustments, and tax measures would reflect from March 2023,” it had said. “We estimate February 2023 inflation at 29.6%, and March 2023 at 33.6%.”

Inflation could average 33% in H1 2023: Moodys

Inflation in Pakistan could average 33% in the first half of 2023 before trending lower, and a bailout from the International Monetary Fund alone is unlikely to put the economy back on track, a senior economist with Moody’s Analytics told Reuters.

“Our view is that an IMF bailout alone isn’t going to be enough to get the economy back on track. What the economy really needs is persistent and sound economic management,” senior economist Katrina Ell said in an interview.

“There’s still an inevitably tough journey ahead. We’re expecting fiscal and monetary austerity to continue well into 2024,” she added.

New wave of inflation grips Pakistan

Back in January, Pakistan’s Consumer Price Index (CPI)-based inflation clocked in at 27.6% on a year-on-year basis. CPI is the benchmark we use to measure inflation in the country.

During the Covid months, it was around 9% and in August 2018 it was hovering at 6%. Inflation started its climb in November 2021.

The CPI for November and December 2022 was around 24%.

The last time it come closer to the current level of 27.6% was in August 2022 when inflation hit 27.3 and we saw prices jump.