ISLAMABAD: Annual inflation rate jumped to 7 percent in the month of October, the highest in four years, from 5.12 percent a month earlier, due to a sharp rise in gas prices and multiple reductions of the rupee.
On a month-on-month basis, prices pointed 2.56 percent in October, according to data released by the Bureau of Statistics on Friday. Prices fell 0.06 percent in September on the same basis. The annual inflation rate is the highest since September 2014, when it had hit 7.68 percent.
The flow in inflation was instigated by a 104.91 percent hike in gas prices. Pakistan’s central bank had warned in September that rising oil prices and currency devaluing were likely to push up primary inflation.
The prices of electricity and petroleum products were increased recently and will reflect in the inflation number of November 2018 which may settle beyond the current rate of 7 percent.
State Bank of Pakistan (SBP) has devalued the local currency five times since December, weakening it by 26 percent against the dollar during the period. In September, natural gas prices were upraised up to 20 percent, reducing customer grants that were a financial drag on the government’s budget.
In an effort to prevent a future currency disaster, Pakistan is looking for economic support from the International Monetary Fund and friendly countries. Saudi Arabia agreed to a $6 billion rescue package earlier this month.