Pakistan’s headline inflation rises to 11.5% in November, highest in 21 months

ISLAMABAD: Pakistan’s annual consumer price inflation rate rose to 11.5% in November, the country’s statistics agency said on Tuesday.

Analysts PEN reached out to said the November number was higher than expected.

The figure was also up from 9.2% the previous month as the government and central bank continue their struggle against inflation, which has hit its highest level in 21 months. In February 2020, the number clocked in at 12.40%, revealed data provided by the Pakistan Bureau of Statistics (PBS).

This takes 5MFY22 average inflation to 9.32% YoY compared to 8.76% in 5MFY21, added a note by a brokerage house.

The State Bank of Pakistan (SBP) this month lifted rates by 150 basis points, in part due to surging price growth. The interest rate now stands at 8.75%, the highest level since April 2020.

High inflation has become a major headache for the government that has had to deal with issues on multiple economic fronts including a falling rupee, widening current account deficit, and protests by the opposition.

On Monday, the rupee hit its lowest level in history against the US dollar, the second time just during November alone, as the currency market battled with delays in announcement of the International Monetary Fund (IMF) agreement.

While it registered a minor gain on Tuesday, many believe the rupee’s downward slide is likely to continue especially if international prices of commodities increase.

Pakistan’s current account deficit has also widened to over $1.6 billion in a month as pressure on balance-of-payments increases.