Arooj Zulfiqar

The Consumer Price Index (CPI) inflation rate rose to 29.2 percent on a year-on-year basis in November 2023, compared to an increase of 26.8 percent in the previous month and 23.8 percent in November 202, according to WealthPK. According to the data released by the Pakistan Bureau of Statistics (PBS), the CPI increased by 2.7 percent on a month-on-month basis in November 2023, compared to an increase of 1.0 percent in the previous month and an increase of 0.8 percent in November 2022. On a month-on-month basis, the CPI increased by 0.4 percent in November 2023, compared to an increase of 0.9 percent in the previous month and an increase of 1.3 percent in November 2022. The CPI inflation urban increased to 30.4 percent on a year-on-year basis in November 2023 compared to an increase of 25.5 percent in the previous month and 21.6 percent in November 2022. On a month-on-month basis, it increased to 4.3 percent in November 2023 compared to an increase of 1.1 percent in the previous month and an increase of 0.4 percent in November 2022.

The CPI inflation rural increased to 27.5 percent on a year-on-year basis in November 2023 as compared to an increase of 28.7 percent in the previous month and 27.2 percent in November 2022. "The rising inflation in Pakistan is a serious concern that goes beyond economic figures and has a deep impact on the daily lives of citizens,” Ali Kemal, Chief Economist at the SDG Support Unit of the Ministry of Planning Development and Special Initiatives, told WealthPK. The impact of such high inflation is far-reaching for the economy and people's lives. One of the most notable effects is that it reduces the purchasing power of consumers, which means their money can buy less than before. This is particularly problematic for those on lower incomes, as they already have less money to spend, Kemal said. Furthermore, high inflation also leads to other negative consequences, such as a decrease in investment and a rise in interest rates. These factors can further exacerbate the economic impact of inflation and make it even harder for people to manage their finances, he warned.

He said, “The international market dynamics have played a pivotal role in exacerbating the situation, with surges in commodity prices, including oil, food, and other essential raw materials. As a net importer of many of these goods, Pakistan has felt the full force of these cost escalations. Additionally, the country's high poverty rate is worsening, leading to increased social and political instability.” Kemal called for urgent measures to control inflation and provide relief to those who are bearing the brunt of these price hikes. He stressed that tackling the high CPI inflation needs a comprehensive strategy that includes sound fiscal policies, stable exchange rates, and actions to boost productivity and ease supply constraints. He also emphasized the importance of collaborating with international partners to ensure stable prices for vital imports.

Credit: INP-WealthPk