Rising inflation rate continued to bite as the Consumer Price Index (CPI)-based reading hit 12.7% on a year-on-year basis in March 2022, compared to 12.2% in the previous month and 9.1% in March 2021, showed data released by the Pakistan Bureau of Statistics (PBS) on Friday.

On a month-on-month basis, CPI reading increased by 0.8% in March 2022 as compared to increase of 1.2% in the previous month and increase of 0.4% in March 2021.

February: Pakistan's inflation reading drops marginally to 12.2%

Inflation has remained a thorny issue for the Pakistan Tehreek-e-Insaf (PTI) government. High inflation has been accompanied by a widening current account deficit amid surge in global commodity prices, especially oil.

Despite the massive reduction in February, Pakistan’s current account deficit has ballooned to $12.1 billion in the first eight-month period of the ongoing fiscal year (July-February of FY22), compared to a surplus of $994 million during the same eight months of the previous fiscal year (FY21). This has put pressure on the rupee that has consistently hit record lows in recent days, adding to expectations of higher inflation.

Meanwhile, CPI inflation in urban areas increased by 11.9% on year-on-year basis in March 2022 as compared to an increase of 11.5% in the previous month and 8.7% in March 2021. On a month-on-month basis, it increased by 0.7% in March 2022 as compared to increase of 0.9% in the previous month and increase of 0.3% in March 2021.

CPI inflation in rural areas increased by 13.9% on year-on-year basis in March 2022 as compared to an increase of 13.3% in the previous month and 9.5% in March 2021. On month-on-month basis, it increased by 1.0% in March 2022 as compared to increase of 1.5% in the previous month and increase of 0.5% in March 2021.

Pakistan's January inflation reading hits 13%, highest in two years

The Sensitive Price Index (SPI) inflation on YoY increased by 13.0% in March 2022 as compared to an increase of 18.7% a month earlier and an increase of 18.7% in March 2021. On MoM basis, it increased by 0.6% in March 2022 as compared to increase of 1.3% a month earlier and increase of 5.7% in March 2021.