Pakistan inflation highest in 13 years, with 21.3% up

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Pakistan inflation highest in 13 years, with 21.3% up

The consumer price index CPI in Pakistan rose 21.3% from a year earlier, for the South Asian nation's highest inflation in 13 years, according to the statistics bureau on Friday.

The CPI was up 13.8% on the year in May. Fuel prices have gone up about 90% since the end of May after the government scrapped costly fuel subsidies in a bid to cut its fiscal deficit and resumption of an International Monetary Fund bailout programme.

Transport saw its index rise by 62.2% in June.

The price index for food items, which make up about a third of the CPI basket, rose 25.9%.

Pakistan has been struggling with high inflation for the last few months.

In March 2022, subsidies for fuel and power were adopted by the government of former Prime Minister Imran Khan, despite rising global oil prices, which faced mounting discontent over his handling of the economy and rising inflation.

In April he was ousted and the new government began reversing the costly subsidy that it brought on par with international prices late last month.

The cash-strapped government has imposed a petroleum levy in its effort to reduce the fiscal deficit, as prices of fuel went up further on Thursday.

The levy, which officials expect to rise further, was part of the fiscal consolidation measures agreed with the IMF to resume the bailout programme.

According to a research report by Topline Securities, inflation is expected to remain around 17% to 19% in fiscal year 22 -- 23.

The report expects a policy rate hike by the central bank in a meeting next week.

The State of Bank of Pakistan has already raised the policy rates by 400 basis points in 2022, it added.