AP photo.
Islamabad: The year-on-year inflation in cash-strapped Pakistan hit 35.37 per cent in March, which is the highest in the country for around five decades. The government is desperately trying to ink the monetary deal with International Monetary Fund (IMF) Agence France-Presse.
The government released data on Saturday also suggested that the Month-on-month inflation was 3.72 per cent in March. The average inflation rate for the past year was 27.26 per cent.
Multiple factors like financial mismanagement over the past years, political instability, a shooting global energy crisis and severe floods that inundated a third of the country last year were cited as the reasons that took Pakistan’s economy to the brink of collapse.
Pakistan now needed millions of dollars as financing to fill up the existing debt, but the foreign exchange reserves are shrinking, and the Pakistan rupee is in free fall.
Most of the pressure of the economic crisis is being faced by low-income Pakistani families. At least 20 people died in the last nine days of Ramadan in stampedes while crowding before food distribution centres.
Experts opine that the nature of the inflation gives the indication that a famine-like situation is brewing.
On Friday, around 121 people died in a stampede in Karachi at a factory which distributed Ramadan aid.
Pakistan, which has a population of more than 220 million, is deep in debt and must enact severe tax reforms as well as push up utility prices to avail of the $6.5 billion IMF bailout, AFP reports.
The country’s finance ministry had said in its monthly review report that inflation is to continue at elevated levels due to the market frictions caused by the relative demand and supply gap of essential items, exchange rate depreciation and recent upward adjustment of administered prices of petrol and diesel.