Inflation rises to 48-year high of 27.55% in Pakistan

Inflation has risen to a 48-year high in crisis-hit Pakistan, where the International Monetary Fund is visiting for urgent talks, according to data released on Wednesday by the country's Bureau of Statistics.

Inflation in January was recorded at 27.55 percent, the highest since May 1975, with thousands of containers of imports held up at Karachi port.

Pakistan's economy is in dire straits, stricken by a balance of payments crisis while it attempts to service high amounts of external debt.

The world's fifth-biggest population has less than $3.7 billion in the state bank -- enough to cover just three weeks of imports.

Prices were up 2.9% in January from the previous month, the Pakistan Bureau of Statistics (PBS) said in a statement. In December, the CPI rose 24.5% on year.

“The Consumer Price Index (CPI) inflation on a year-on-year basis for January is forecast in the range of 24-26pc,” said the Ministry of Finance in its Monthly Economic Update & Outlook, adding that the recent political and economic uncertainties both were causing inflationary expectations upward.

The ministry also made an upward revision in its inflation forecast to 24-26pc for the year, from 21-23pc it had estimated in December.

Late last month, the government removed an unofficial cap on the USD-PKR exchange rate, as a result of which the local currency lost Rs38.74 between Jan 26-30. Separately, it also hiked petrol prices by Rs35 a litre. The full impact of these measures is yet to be reflected in the CPI.

On Tuesday, an IMF delegation arrived in Islamabad to revive negotiations over a stalled bailout package with the government, which has so far held out from meeting the global lender's tough conditions.