Karachi: Inflation is likely to hit fresh peaks and is projected to reach over 37 percent year-on-year (YoY) in May against 36.4 percent recorded in April, JS Global Securities, brokerage house said in report.

“We expect datapoint to clock in at record-high of 37.27 percent, as current workings suggest another sequential increase of 1.07 percent month-on-month,” said JS Global. “This would take 11MFY23E headline Consumer Price Index (CPI) to 29.03 percent,” it added.

Brokerage house was of view that rise in inflation is attributed to higher increase in food prices, which is 30 percent of CPI basket. “We expect food inflation to clock in at 47.99 percent YoY this month, with sequential increase of 0.81 percent MoM, finally pacing down from its recent run rate of 4.5 percent MoM since past four months,” it said.

It added that recent decline in POL product prices is not expected to reflect in May’s readings, which is expected to be peak for inflation readings.

“This is highest year-on-year inflation since available data i.e. July 1965,” Tahir Abbas, Head of Research at Arif Habib Limited said. High inflation is just one of issues currently putting Pakistan’s economy in distress. Country’s economy has continued to bear the burden of mounting debt and falling foreign exchange reserves.

Published in The Daily National Courier, May, 23 2023

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