ISLAMABAD: Inflation in crisis-racked Pakistan has jumped 31.5 percent, according to state data published on Wednesday, as the country continues to stare down the IMF negotiation team withholding a crucial bailout.
Year-on-year (YoY) inflation for February is the highest in decades, while perishable food and transport costs rose by about half as a cost-of-living crisis continues to bite the masses.
“The 30 percent high figure is where families will be compelled to make sacrifices and choices,” analyst Torek Farhadi said.
Years of political instability and financial mismanagement have pushed the country’s economy to the brink of collapse, fueled by a global energy crisis and massive floods that submerged vast areas of the country in 2022.
Pakistan’s forex reserves have dwindled to only $3.25 billion — enough for about three weeks of imports — causing widespread factory closures and paralyzing supply chains.
Pakistan battling to strike deal with IMF
To pull the country out of the current crisis, Prime Minister Shehbaz Sharif is battling to revive another tranche of a $6.5 billion loan agreement sketched with the IMF in 2019.
However, IMF is demanding stringent reforms, including subsidy slashing and tax rises, likely to rile voters ahead of the next general elections due no later than October.
Last month IMF team flew to Pakistan for a 10-day visit but returned to the US without sealing a deal.
Pakistan insisted the two sides were on the brink of agreeing on the terms, but the loan has yet to be unlocked.
“The ordinary people pay the price for the loan packages that the big boys negotiate,” the analyst said.
Analysts said that inflation is expected to rise even after a deal has been reached with the IMF. – AFP
