Inflation Rate in Pakistan 2023 in February: Inflation is a persistent rise in the general level of prices in an economy. In Pakistan, the inflation rate has been a major concern for policymakers, businesses, and households. The inflation rate reached an all-time high of 30% in February 2023 and still started to show a uprising trend in further month. In this article, we will examine the inflation rate in Pakistan in 2023, its causes, effects, and outlook.
Year Wise Inflation Rate in Pakistan 2019 – 2023
2019 | 7.3%
2020 | 9.1%
2021 | 8.9%
2022 | 24.5%
2023 | 30% (February)
Expected Inflation Rate in Pakistan 2023 by SBP at the End of this Year
The Inflation Rate in Pakistan 2023 by SBP has forecast average inflation of 21-23% in FY23 whereas “our inflation estimate is around 26%.”
Also Read: Inflation English Essay with Quotations in Pakistan
Causes of Inflation:
As per expectations, the upcoming increase in policy rate is likely to raise the cost of bank financing, potentially leading to a reduction in the demand for foreign financing for imports. This development could help address the alarming decline in foreign exchange reserves, which have dwindled to critically low levels, currently standing at $4.6 billion. Inflation in Pakistan is caused by a combination of factors, including:
- Increase in money supply
- Depreciation of the Pakistani rupee
- High oil prices and transportation costs
- Supply chain disruptions
- Increase in demand due to economic growth
Effects of Inflation:
Inflation has several adverse effects on the economy and society, including:
- The reduced purchasing power of the people
- Increase in the cost of living
- Reduced savings and investment
- Decrease in economic growth
- Increase in unemployment
Outlook:
The State Bank of Pakistan (SBP) has projected that the inflation rate in 2023 will be between 30% and 34%. The SBP has taken several measures to control inflation, such as increasing the policy rate, tightening monetary policy, and improving the supply chain of essential goods. However, the inflation rate may still remain high due to external factors such as global oil prices and the COVID-19 pandemic.
Conclusion:
In conclusion, inflation in Pakistan by SBP is a significant challenge that has far-reaching impacts on the economy and society. While the inflation rate is projected to decline in 2023, there are still challenges that need to be addressed. The government and the SBP must continue to take measures to control inflation and promote economic growth. By doing so, they can ensure that the people of Pakistan can enjoy a better standard of living and a more prosperous future.