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Inflation peaked to 14-year high in June

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.

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