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Business & Finance

Inflation could break further records, clock in above 34%: report

  • JS Global says higher gas and cigarette prices are among key drivers of inflation
Published March 20, 2023

A brokerage house has warned that inflation in March is expected to break further records, and could clock in above 34%, amid announced macro adjustments.

JS Global, in a report released on Monday, said the Consumer Price Index (CPI) based inflation for March 2023 is expected to clock in at 34.34% YoY, highest since at least 1965, with a month-on-month increase of 2.95%.

“In addition to higher food being the usual culprit, higher gas prices amid long-due adjustment in gas tariffs and higher cigarette prices over recently applied higher FED (Federal Excise Duty) are among key drivers,” said the report.

“This would be the third consecutive month of more than 250bp MoM inflation increase, which historically hovers an average around 80 – 100bp,” it added.

JS Global’s report went on to say that mid-month POL product price increase was incorporated in Feb’s inflation readings, and that incorporating the same practice for this month would take expected CPI to 34.5%.

“To recall, government has announced up to Rs13/ltr increase in POL prices in mid-March, while transport prices for the purpose for CPI calculation are collected during 7th to 10th of each month as per PBS”.

It also said core inflation will maintain its ongoing upward trajectory and is expected to reach to 25% this month, crossing the high last made 14 years ago.

“The higher core inflation indicates second round of inflation in various segments of the inflation basket, which are likely triggered by the sharp energy prices and PKR depreciation witnessed in the past couple of months.”

Pakistan, which remains engulfed in one of its worst economic crises, saw CPI-based inflation hit 31.5% on a year-on-year basis in February 2023 as compared to an increase of 27.6% in the previous month and 12.2% in February 2022. This was the highest annual rate in nearly 50 years, as food, beverage and transportation prices surged more than 45%.

SBP raises key interest rate by 300bps, takes it to 20%

Comments

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Tulukan Mairandi Mar 20, 2023 02:27pm
34% inflation. Wow. Should i laugh or cry
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Raja Atif Azad Mar 20, 2023 02:34pm
The burden of incompetence of all politicians shifted to poor/middle class of the country , who already have no basic rights like , security , health , education , .......etc. I hope the heart of elite melt during Ramzan , and respectfully support/help the poor/middle class.
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Nauman Ayub Mar 20, 2023 03:10pm
In reality inflation is more than 50%.
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Muhammad Ali Mar 20, 2023 03:46pm
"Beggars are not choosers." Well done PDM. They will not get lost until break our necks.
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Mubashir Munir Mar 20, 2023 03:56pm
No check on prices where is government and Courts
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Mubashir Munir Mar 20, 2023 04:10pm
Why there is no check on prices the government is it interested in work
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bonce richard Mar 20, 2023 04:33pm
@Nauman Ayub , I agreed more than 50% but our corrupted govt hides.
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