Pakistan’s inflation rate reached an all-time high of 31.5% in February due to a sharp increase in prices of food, housing, and transportation, according to data from the Pakistan Bureau of Statistics (PBS) released on Wednesday.
The inflation surge surpasses the Ministry of Finance’s prediction of a 28% to 30% range. The monthly inflation rate rose by 4.3% in February compared to January, mainly due to the rise in average food prices such as poultry, fruits, pulses, oil, vegetables, ghee, LPG, gas charges, and domestic petroleum products.
The core inflation rate, which excludes volatile energy and food prices, rose to 17.1% last month in urban areas and 21.5% in rural areas, indicating that price growth is gathering pace across most categories of goods and services.
Economist Sana Tawfiq from Arif Habib Limited believes that inflation will remain high in the coming months due to higher food prices, tariff hikes, and a weaker currency. The inflation reading also suggests that the government will have to re-evaluate its strategy to unlock the critical $1.1 loan tranche from the International Monetary Fund (IMF).
The Wholesale Price Index (WPI) monitoring prices in the wholesale market also rose sharply to 36.4% in February compared to 23.6% in the same month a year ago. The inflation rate in urban areas surged to 28.8% in February, while rural areas soared to 35.6% compared to the same period last year. The food inflation rate in villages and cities rose to 47% and 41.9%, respectively, on a yearly basis.

The inflation rate for the housing, water, electricity, gas, and fuel group increased by 3.11% year-on-year in the last month. Average prices for the transport group rose by 3.34% in February, while prices for restaurants and hotels increased by 2.36% year-on-year.
According to the PBS, on a month-on-month basis, the price of chicken jumped by 19.82%, followed by a 17.21% increase in cooking oil price, a 16.59% rise in vegetable ghee, and nearly 16% in cigarettes. Prices of pulses, fish, meat, and fresh milk recorded an increase within a range of 1.5-11% in the last month.
The average inflation rate for the first eight months (July-February) of the current fiscal year stood at 26.19%, according to PBS data. The central bank has preponed the upcoming monetary policy committee meeting to March 2, and it is expected that the alarming inflation reading will lead to a further rise in interest rates.