Last update: May 03, 2023, 12:34 PM HST
A cost of living crisis and inflation are eating away at the lives of Pakistani citizens as the government awaits the release of a suspended bailout package from the IMF. (Representative image: Reuters)
The Pakistani currency is one of the worst performing currencies in the world in 2023, as it fell 20% against the dollar
Pakistan became the first country in Asia with the fastest inflation overtaking Sri Lanka as the value of the Pakistani rupee fell to low levels and food and energy prices soared record.
Consumer prices rose 36.4% in April from a year earlier, a five-decade high, according to Bloomberg.
Islamabad’s inflation rate is the highest in Asia and up from 35.4% in March.
The report said inflation in Pakistan outpaced price rise in Sri Lanka which was 35.3% in April. Colombo has started to show signs of recovery after an economic crisis.
The Pakistani currency is one of the worst performing currencies in the world in 2023, as it fell 20% against the dollar, making imported goods more expensive.
Transport prices soared 56.8% while food inflation hit 48.1% in April from a year earlier. Meanwhile, the price of clothes and shoes increased by 21.6% and the cost of housing, water and electricity increased by 16.9%. Rural areas of Pakistan recorded food inflation of 40.2%.
Prices for all essentials, including food, medicine, transport and electricity, have risen dramatically. Shortages of food and fuel have only aggravated this crisis. Pakistan imports most of these items, but the country faces a huge cash shortage; and a food crisis, observed so far in some regions of the country, could last longer and affect more regions.
Inflation is expected to rise further after authorities raised taxes and fuel prices to meet IMF conditions for the revival of the $6.5 billion loan program.
Pakistan’s finance ministry said inflation is expected to remain at high levels in the coming months, despite the central bank’s tight monetary policy.
Pakistan has been in economic turmoil for several months with an acute balance of payments crisis, while talks with the IMF to secure $1.1 billion under a 6.5 billions of dollars did not come to fruition.
Pakistan’s current GDP and per capita income are the lowest in its neighborhood and only Afghanistan’s war-torn economy is weaker. Unemployment and inflation rates are among the highest in the region.
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