KARACHI: Pakistan’s inflation accelerated to a 17-month high in September following devastating floods that drove up food prices, data showed on Monday.
Consumer prices rose 15.71 per cent from a year earlier, more than analysts had expected, and were up 2.65 per cent from August, the Federal Bureau of Statistics said.
Analysts said food would remain costly in the months ahead and combined with rising energy costs would keep inflation high.
A Reuter’s poll of 12 analysts on Thursday had forecasted a rise of 14.95 per cent in the year through September.
“The main reason was the increase in food prices after the floods, and in September perishable food items prices rose 54 per cent from a year ago,” said Khalid Iqbal Siddiqui, director at Invest and Finance Securities Ltd.
“Going forward inflation is likely to stay on the higher side because of increasing food prices and also because of rising international oil prices and elimination of electricity subsidies.” The government announced a two per cent increase last month in electricity tariffs.
The central bank raised the key interest rate to 13.5 per cent from 13 percent last month, its second consecutive hike, trying to curb the country’s deepening fiscal deficit and combat rising inflation.
Analysts said the State Bank of Pakistan was likely to continue to pursue a tight monetary policy as it expects inflation for the fiscal year ending June 30 to be between 13.5 percent and 14.5 percent, compared with an original target of 9.5 percent.
The International Monetary Fund has forecast Pakistan’s inflation of 13.5 percent this fiscal year.
Analysts said rising global oil prices are also likely to fuel inflation.
Wholesale prices rose 21.50 percent from a year ago, and 2.09 percent from August.