Pakistan inflation rises to 31.4% in September

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Pakistan inflation rises to 31.4% in September

Pakistan's inflation rate clocked in at 31.4 percent year-on-year in September, rising from 27.4 percent in August, according to statistics Bureau data, as the nation reels from high fuel and energy prices.

The country is embarking on a tough path to economic recovery under a caretaker government, after a $3 billion loan programme approved by the International Monetary Fund in July averted a sovereign debt default, but with conditions that complicated efforts to control inflation.

In September, inflation increased 2 per cent, compared to an increase of 1.7 per cent in August.

The reforms requiring the IMF bailout, such as an easing of import restrictions and a demand that subsidies be removed, have already fuelled annual inflation, which has surged to a record 38.0 per cent in May.

The interest rates have also risen to their highest at 22 per cent, and the rupee hit all-time lows in August before recovering in September to become the best performing currency following a clampdown by authorities on unregulated FX trade.

On Friday, the ministry of finance said in its monthly report that it anticipated inflation remaining high in the coming months, hovering around 29-31 per cent because of an upward adjust in energy tariffs and a significant increase in fuel prices.

However, inflation is expected to ease, especially from the second half of the current fiscal year, which begins on Jan. 1, the report said.

On Saturday, Pakistan lowered its petrol and diesel prices from a record high after two consecutive hikes. The government cited the clampdown on unregulated FX trade and international petroleum prices as the causes of the improvement in the exchange rate.

Since November 2021, inflation has hovered double digits, while inflation has risen to double digits. The South Asian nation had a target of 21 percent inflation for the current fiscal year, but it averaged 29 percent during the first quarter.

The worsening economic conditions, as well as the rising political tensions in the run-up to a national election scheduled for November, led to sporadic protests in September, with many Pakistanis saying they are struggling to make ends meet.