In September, Pakistan’s inflation rate increased to 31.4% compared to 27.4% in August, according to data from the statistics bureau.
This surge in inflation is primarily due to the high prices of fuel and energy, which have been a significant burden on the country’s economy.
Pakistan is currently navigating a challenging path towards economic recovery under a caretaker government. Earlier in July, the International Monetary Fund (IMF) approved a $3 billion loan program to prevent a sovereign debt default. However, this loan comes with certain conditions that have made it difficult to control inflation.
In September, inflation also went up by 2% on a month-to-month basis, compared to a 1.7% increase in August. The reforms mandated by the IMF bailout, such as relaxing import restrictions and eliminating subsidies, have contributed to the overall inflationary pressure. In fact, in May, annual inflation reached a record high of 38.0%.
Additionally, interest rates in Pakistan have climbed to a steep 22%, and the value of the rupee hit its lowest point in August before showing some recovery in September. This rebound in the currency’s value followed efforts by authorities to crack down on unregulated foreign exchange trading.