(Bloomberg) -- Pakistan’s inflation in September rose for the first time in four months after the government raised fuel prices to meet International Monetary Fund’s conditions for an ongoing $3 billion bailout program.
Consumer prices jumped 31.44% in September from a year earlier, according to data from the Pakistan Bureau of Statistics. The reading exceeds the median estimate for a 30.95% increase in a Bloomberg survey and 27.4% notched in August.
Inflation rising again suggests that policymakers have a case to increase the benchmark policy rate at the next meeting due Oct. 30. Record interest rates cooled prices for three straight months from June and prompted the central bank to hold fire in the last meeting.
The central bank expects inflation to rise this month because of hike in energy prices with gains slowing through to June next year. This year, its average projection for price hikes ranges from 20% to 22%.
The caretaker government raised fuel costs on surging global prices and plans to hike gas prices as part of IMF conditions to continue a bailout program that started in July. The moves are likely to increase living costs and may spark protests again among Pakistanis who are feeling the pinch.
Transport prices jumped by 31.26% in September from a year ago and food costs were 33.11% higher, official data showed. Housing, water and electricity prices increased by 29.70%.
Pakistan may get some relief from persistently high inflation after a recent government crackdown on dollar hoarders and smugglers. This has helped to make the rupee the best performing currency in the world in September and could make imports cheaper.
--With assistance from Betsy Joles.
©2023 Bloomberg L.P.