ISLAMABAD: The inflation rate in Pakistan spiked to 21.3% in June — the highest pace since 2008 — because of exponential growth in the prices of petroleum products, the Pakistan Bureau of Statistics (PBS) reported.
On a month-on-month basis, inflation soared to a 30-year high as it clocked in at 6.3% in the last month of the fiscal year 2021-22, compared to an increase of 0.4% in the previous month and a decrease of 0.3% in May 2021.
According to the PBS, the CPI-based inflation rate jumped 19.8% in urban areas and 23.6% in villages and towns.Analysts are of the view that the inflation rate was “way above the market expectation.”
“An increase came on the back of three sectors — food, transport, and housing and electricity,” she said, identifying four major reasons behind the whopping increase:
- Low-base effect;
- Removal of subsidies on petroleum products;
- Increase in electricity tariffs; and
- Rising price of food items.
The analyst was of the view that the impact of a significant increase in the price of petroleum products as the coalition government rolled back the subsidies provided by the Imran Khan-led government was significantly reflected in June’s inflation rate.