Gas Price Hike in Pakistan Raises Inflation Rate to 7 Percent

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Annual inflation rate of Pakistan increased to 7 percent from 5.12 percent in October, the highest in four year as gas price hike in Pakistan.

This happened due to steep increase in gas prices and multiple devaluations of Pakistani rupee.

According to data released by the Bureau of Statistics on Friday, prices spiked 2.56 per cent in October. Prices fell 0.06 per cent in September on the same basis.

The annual inflation rate is the highest since September 2014, when it had hit 7.68 per cent.

The surge in inflation was caused by a 104.91 per cent hike in gas prices. Pakistan’s central bank had warned in September that rising oil prices and currency devaluations were likely to push up underlying inflation.

State Bank of Pakistan has devalued the local currency five times since December, weakening it by 26 per cent against the US dollar during the period.

In September, natural gas prices in Pakistan increased by up to 20 per cent, slashing consumer subsidies that were a fiscal drag on the government’s budget.

In an effort to avert a looming currency crisis, Pakistan has been seeking economic assistance from the International Monetary Fund and friendly countries.

Saudi Arabia agreed to a $6 billion rescue package earlier this month and new Prime Minister Imran Khan is visiting China this week in search of fresh loans from Beijing.

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