Pakistan Inflation Surges to 11.2% Amid Fuel and Wheat Price Increases

Inflation in Pakistan has surged to 11.2% in August, returning to double digits just one month after it slipped below 10%. The Consumer Price Index (CPI) acceleration was driven by the government's policy of fully recovering fuel costs and taxes from consumers, as well as provincial failures in ensuring wheat supplies that contributed to higher food prices.

The Pakistan Bureau of Statistics reported that motor fuel prices were 25% higher than August last year, with the government charging three different taxes - petroleum levy, carbon levy, and customs duty - in addition to recovering full international prices from consumers. This resulted in high-speed diesel prices being the highest in South Asia, while petrol was second-highest after Bangladesh.

Food inflation increased to 12.1% in urban areas, with a 13.2% increase in villages and towns last month. The surge in wheat and wheat flour prices, coupled with increased transportation charges, has pushed food prices higher. Core inflation - calculated after excluding volatile energy and food prices - also accelerated, recording between 8.5% to 8.8%.