Pakistan’s inflation quickened in January as thousands of containers of food items, raw materials and equipment are stuck in ports after the cash-strapped government curtailed imports.
Consumer prices rose 27.55 percent from a year earlier, according to data released by statistics department on Wednesday. That compares with a median estimate for a 25.9 percent gain in a Bloomberg survey and a 24.47 percent jump in December.
The latest reading comes a week after the central bank increased its benchmark rate to the highest in more than 24 years to help stabilize an economy that’s spiralling deeper into crisis amid supply shortages, sky-high prices and funding crunch. Pakistan’s troubles worsened after last year’s devastating floods that amplified the impact of political turmoil and the fallout from the war in Ukraine.
About 6,000 containers are stranded in ports, including thousands of tons of poultry feed ingredients that pushed chicken prices to a record earlier this year. The logjam is aggravating inflation that has lingered above 20 percent since June as the government limited imports amid scare funds.
Foreign-currency reserves have dwindled to a nine-year low of $3.68 billion, equivalent to less than a month of imports while local banks have been refusing to issue letters of credit, leading to a standstill that puts businesses at risk of shutting down.
The local currency plunged to a record low this year after money exchangers abolished the limit on the dollar-rupee rate in the open market to curb the black market. A more market-determined currency may help Pakistan secure more money from the International Monetary Fund, whose loan disbursement to the nation has seen multiple delays.
(Edited by : Soham Shetty)
