Pakistan’s inflation accelerated to a two-year high as conflict in the Middle East drove up energy import costs.
The consumer price index rose 11.7% in May from a year earlier, data from the Pakistan Bureau of Statistics showed Monday. The reading is lower than the median estimate of 12.2% in a Bloomberg survey of economists. Inflation climbed 10.9% in April.
The conflict in the Middle East has heightened risks for fuel-importing economies across Asia, where rising energy prices are worsening inflation and straining external balances. That is forcing policymakers to take emergency measures to stabilize currencies and contain economic fallout.
Pakistan’s central bank raised its benchmark interest rate for the first time in almost three years in April. The monetary authority will hold its next rate review meeting on June 15.
“Pakistan’s inflation surge in May, and the prospect of double-digit readings through the next quarter, should prompt the State Bank of Pakistan to raise rates again in June,” Ankur Shukla, an economist at Bloomberg Economics wrote in a note. “Higher energy costs — driven by elevated crude prices and supply disruptions linked to the Iran war — are feeding into transport and core prices.”
Food costs rose 7.9% last month from a year earlier, at a higher pace than 7.6% in April. Housing & energy prices moved up 16.8% in May, similar to a month earlier, bureau data showed.
Since the war began, authorities have mostly raised fuel prices several times. Petrol and diesel prices remain 48% and 38% higher, respectively, than their pre-war levels.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.