PAKISTAN’s headline inflation eased for the second month in a row in July, government data released today showed, but a fuel price hike announced overnight could see a fresh rise in August.

Year-on-year inflation was 28.3% compared with 29.4% in June, the Bureau of Statistics said in its monthly report, with food prices the driving factor.

Prices were up 3.5% month-on-month.

Inflation hit a record 38% in May but the central bank has kept the key interest rate at 22% in a bid to stabilise prices.

Years of financial mismanagement have pushed Pakistan’s economy to the limit, exacerbated by the Covid pandemic, a global energy crisis and record floods that submerged a third of the country last year.

But Islamabad struck a US$3 billion (RM13.56 billion) standby deal with the International Monetary Fund last month that could provide temporary relief for the country’s ballooning foreign debt.

The deal forces the government to scrap a range of subsidies that help the poor but the fuel price hike is largely in line with a rise in oil globally. – AFP, August 1, 2023.