Pakistan has hit a record high in inflation, as rising tariffs and energy prices continue to take their toll. The Pakistan Statistics Office reported on April 1 that the Consumer Price Index (CPI) had risen by 35.37% in March from a year earlier. This was higher than expected, with economists predicting a 34.8% increase and far above the 31.55% increase seen in February.
The surge in inflation may force the Bank of Pakistan to raise its interest rate target once again at its April 4 meeting. Out of the 14 economists surveyed, 13 are expecting the central bank to raise its interest rate target in response to the high inflation rate.
In March, the Central Bank of Pakistan had already raised interest rates by 3 percentage points to 20%, as a measure to curb the soaring inflation that had resulted from a weakened Pakistani rupee currency. The country had also implemented hikes in tariffs and energy prices with the aim of reaching a financial assistance agreement from the International Monetary Fund (IMF).
The current situation highlights the ongoing challenge for Pakistan to balance its economic needs against the welfare of its citizens. The rising cost of living may create additional hardships for the already struggling population. Nonetheless, the government’s efforts to reach a financial assistance agreement with the IMF, coupled with the central bank’s proactive stance to curb inflation, demonstrate the country’s commitment to overcoming its economic difficulties.