Inflation in Pakistan

 

Pakistan has experienced a relatively high level of inflation over the past few years. According to the Pakistan Bureau of Statistics, the average inflation rate for the fiscal year 2020-21 was 8.9%, which was higher than the target of 6.5% set by the State Bank of Pakistan. Inflation has been driven by a number of factors, including an increase in the prices of food, fuel, and electricity, as well as a depreciation of the Pakistani rupee against other currencies.

The COVID-19 pandemic also had a significant impact on inflation in Pakistan. The lockdowns and disruptions to supply chains led to a shortage of goods and services, which drove up prices. In addition, the government's fiscal stimulus measures, such as cash transfers and subsidies, contributed to higher inflation by increasing demand for goods and services.

The State Bank of Pakistan has implemented a number of measures to try to manage inflation, including raising interest rates, tightening monetary policy, and increasing the reserve requirement for banks. The government has also taken steps to address supply-side factors, such as increasing the supply of food and energy, and has implemented price controls on certain goods to try to keep prices stable. However, inflation remains a significant challenge for Pakistan's economy, and its impact is felt particularly by low-income households, who are most vulnerable to rising prices.