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Yearly Inflation Rates of Pakistan ( 1990-91 = 100)

Inflation Rates based on Sensitive Price Indicator (SPI), Consumer Price Index (CPI) and
Wholesale Price Index (WPI) are

Period SPI CPI WPI


1991-1992 10.54 10.58 9.84
1992-1993 10.71 9.83 7.36
1993-1994 11.79 11.27 11.40
1994-1995 15.01 13.02 16.00
1995-1996 10.71 10.79 11.10
1996-1997 12.45 11.80 13.01
1997-1998 7.35 7.81 6.58
1998-1999 6.44 5.74 6.35
1999-2000 1.83 3.58 1.77
2000-2001 4.84 4.41 6.21
2001-2002 3.37 3.54 2.08
2002-2003 3.58 3.10 5.57
2003-2004 6.83 4.57 7.91
2004-2005 11.55 9.28 6.75
2005-2006 7.02 7.92 10.10
2006-2007 10.82 7.77 6.94

Pakistan faces high inflation despite historic lows in


region
By: Erum Zaidi | Published: May 12, 2009
KARACHI - As inflationary pressures across the globe continue to dissipate, Pakistan still faces a very
high double-digit inflation.
A regional comparison of inflation reveals the rigidity of inflation in Pakistan in comparison to other
regional players. Except for Iran, all the countries have shown notable deceleration in their inflation rates
from July 2008 to March 2009. Inflation in India is at historic low, whereas, Thailand has seen deflation
during March 2009 from a high of 9.2 percent in July 2008.
Other countries like Philippines, Vietnam, and Sri Lanka witnessed substantial
deceleration in inflation since December 2008.
In Pakistan, the Federal Bureau of Statistics has 17.19 percent inflation in April YoY.
Most of the economists believed the price pressures are still not on ease, as
highlighted from 1.4 percent MoM increase in March. Both, the WPI and SPI have
also depicted a 1.68 percent month-over-month increase.
However, price stresses may ease on account of slackening demand pressures due
to bumper wheat and minor crops.
Although all the price indices like the CPI including core inflation, WPI and SPI have
shown a downward trend in recent months, the decline has been subject to stiff
downward rigidity.
Ministry of Finance’s report titled “Review of Economic Situation for the Period July-
March 2008-09” projected the average inflation for the year (2008-09) close to 20
percent with end year inflation of around 11 percent. The most optimistic estimate
for the next year inflation will be around 6 percent.
Report also pointed out that month-on-month increase in food and non-food inflation
in the months of February and March has been especially disappointing.
The sugar and wheat have to play its role in inflationary environment in Pakistan in
the final quarter of this fiscal year (April-June 2009). The dirty work of extra-market
forces kept fruits of falling inflation away from Pakistan’s consumers.
Notwithstanding, difficult domestic environment, the inflation rate as measured by
the changes in Consumer Price Index (CPI) showed an easing trend beginning in
November 2008, touching 19.1 percent in March 2009 after reaching a record level
of 25.5 percent in August 2008. While the food group was the major source of
inflation in Pakistan during the first nine months of 2008-09, the non-food
component of the CPI has also been persistently high, resulting in overall
stubbornness of the inflation.

INFLATION RATE CONSUMERS PRICE:


Year Inflation rate (consumer prices) Rank Percent Change Date of Information
2
3.90 % 90 2002 est.
003
2
2.90 % 123 -25.64 % 2003 est.
004
2
4.80 % 143 65.52 % FY03/04 est.
005
2
9.10 % 186 89.58 % 2005 est.
006
2
7.90 % 168 -13.19 % 2006 est.
007
2
7.60 % 162 -3.80 % 2007 est.
008

EFFECTS ON INFLATION ON PAKISTAN’S


ECONOMY:

Inflation affects the different sectors of the economy


• Effects on the distribution of income and wealth,
• Effects on production,
• Effects on the Government,
• Effects on the Balance of Payment,
• Effects on Monetary Policy,
• Effects on Social Sector,
• Effects on Political environment and different classes of the people (Debtors
& Creditors, Salaried Class,
• Wages earners,
• Fixed income group,
• Investors and shareholders,
• Businessmen,
• Agriculturists