Islamabad: The recent unprecedented surge in electricity and gas tariffs has propelled inflation in Pakistan to a 50-year peak.
Forecasts indicate that the inflation rate is anticipated to hit 26 percent for the current fiscal year, followed by 15 percent in 2025 and a further decline to 11.5 percent in 2026.
The World Bank reports that inflation in Pakistan during the first half of the ongoing fiscal year has reached its highest levels since 1974, primarily attributed to the sharp uptick in electricity and gas costs, significantly inflating production expenses.
Highlighting the main drivers behind the inflationary pressures, the World Bank underscores the considerable rise in electricity and gas prices across the country. Energy inflation in urban areas surged by 50 percent in the initial half of this fiscal year, marking a notable increase from the previous year’s figures. During this period, energy inflation stood at 50.6 percent, compared to the 40.6 percent recorded in the corresponding period of the preceding year. The average inflation rate for the first half of the fiscal year stands at 28.8 percent, up from 25 percent during the same period in the previous year.
Despite efforts such as stabilizing the rupee, bolstering domestic crop production, and alleviating global market pressures, inflation continues to soar in Pakistan. While the average inflation rate for the current fiscal year is expected to hover around 26 percent, down from 29.2 percent in the prior fiscal year, projections indicate a gradual decline to 15 percent in 2025 and a further decrease to 11.5 percent in 2026.
