Inflation in Pakistan hits highest level in 47 years before full impact of floods

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Inflation in Pakistan accelerated for a sixth consecutive month to hit a new record high in August as deadly floods risk pushing prices higher.

Consumer prices rose 27.26% last month from a year earlier, according to data released by the government on Thursday. That compares with a median estimate of a 26.6% increase in a Bloomberg survey of economists and a 24.93% jump in July. Pakistan’s inflation is the highest since May 1975, according to Foundation Securities Pvt analyst Zeeshan Azhar. citing central bank data.

The inflationary print comes as the country faces a looming food crisis after disastrous floods in late August that would require more imports, adding pressure to its fragile finances. Rice and cotton crops were damaged as well as vegetables such as onions and tomatoes.

Read also | ‘Highest rate on record’: Inflation in UK markets touches the sky

Deadly floods inundate farms in Pakistan, washing away crops

Earlier this week, the South Asian nation secured a $1.1 billion loan from the International Monetary Fund to avoid a default and pave the way for more funding.

Food inflation accelerated to 29.5% year-on-year while transportation jumped 63%, the data showed.

Meanwhile, further fuel tax hikes, as well as rising electricity prices will continue to push prices higher, according to Bloomberg Economics. Pakistan’s central bank held rates steady last month after raising the cost of borrowing by 525 basis points this year.

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