Pakistan inflation rises to 6.2 per cent as core prices surge again

Islamabad [Pakistan], November 4 (ANI): Pakistan's inflation rate rose for the second consecutive month, reaching 6.2 per cent in October, driven by price hikes across multiple categories, particularly non-food and non-energy goods, signalling growing underlying inflationary pressures.
According to data released by the Pakistan Bureau of Statistics (PBS) on Monday, the year-on-year surge aligned with both government and market projections. Authorities have linked the rise to supply disruptions caused by recent floods and the temporary closure of the Pakistan-Afghanistan border, as reported by The Express Tribune.
Urban inflation grew by 6 per cent compared to last year, while rural regions saw a sharper increase of 6.6 per cent, making inflation a renewed focal concern after several months of relative easing.
As cited by The Express Tribune, core inflation, a key metric that excludes volatile food and energy prices to assess long-term trends, also continued to climb. PBS figures reveal that core inflation in urban areas increased to 7.5 per cent from 7 per cent a month earlier, and in rural sectors rose to 8.4 per cent from the previous 7.8 per cent. These figures suggest that inflationary pressure may persist in the coming months.
Recently, the World Bank revised Pakistan's inflation outlook for the current fiscal year to 7.2 per cent, slightly above the official target.
The State Bank of Pakistan (SBP) had earlier cautioned that inflation would rise temporarily due to flood-related shocks before tapering off later in the fiscal year. Despite this, the central bank maintained its benchmark interest rate at 11per cent, significantly higher than the headline inflation level.
Finance Minister Muhammad Aurangzeb stated that interest rates were moving in the right direction and expressed hope for further reductions. The business community, however, has urged the government to ease borrowing costs, arguing that there is ample room for rate cuts.
The Express Tribune further stated that the government has allocated PKR 8.2 trillion for interest payments this year, although Finance Secretary Imdad Ullah Bosal expects actual spending to be lower, citing improved debt management. Meanwhile, the SBP has warned that the 4.2 per cent economic growth target for the year is likely to be missed.
Food inflation also intensified, rising to 4.5 per cent in cities and 6.8 per cent in villages. Prices of non-perishable food items, which constitute nearly 30 per cent of the inflation basket, went up by 6.2 per cent on average, while perishable items grew by 1.7 per cent.
Border disruptions sent tomato prices soaring by 127 per cent, sugar increased by 35 per cent, and wheat and flour prices also jumped. In contrast, prices for onions and chicken fell sharply.
Gas tariffs increased 23 per cent year-on-year, whereas electricity rates dropped by 16 per cent. Minister for Power Sardar Awais Leghari attributed the reduction in power tariffs, down by PKR 10.3 per unit from last year, to renegotiated energy contracts and improved efficiency. (ANI)