Central bank says inflation rates were higher in Argentina, Iran, Nigeria and Turkey
The State Bank of Pakistan (SBP) on Sunday issued a series of tweets clarifying that—contrary to some media reports—the country had not witnessed “the highest inflation in the world” thus far in 2020.
“A chart from our Inflation Monitor has generated erroneous headlines. It compares Pakistan’s inflation to a few developed and developing countries,” the central bank said from its official account on Twitter. “While Pakistan did have a relatively elevated inflation rate so far in FY20, it is not true that it was the highest in the world,” it added.
“For instance,” said the bank, “Argentina, Iran, Nigeria and Turkey’s inflation has been higher. Since January, inflation in Pakistan has fallen sharply and much faster than in most other emerging markets.”
The central bank’s clarification followed reports in various publications that had cited the SBP’s Inflation Monitor for April 2020, and claimed Pakistan had “witnessed the highest inflation not only in comparison with the developed economies but also with emerging economies.”
According to the inflation data made available by the central bank last week, Pakistan’s wholesale price index witnessed a dramatic spike in food prices from September 2019, with the bulk of the inflation facing the citizenry still focused on the essential sector. In comparison, non-food prices have witnessed a drop.
According to the data, January saw the worst inflation, hitting a 12-year peak at 14.6 percent. To overcome this, the central bank increased interest rates to 13.25 percent, said the bank.
However, with the emergence of the coronavirus pandemic and its subsequent movement restrictions, demand contraction lowered inflation, prompting the apex bank to cut interest rates by 5.25 percent within just three months, it added.
While the SBP’s clarification notes that some countries witnessed worse inflation than Pakistan, graphs accompanying the Inflation Monitor had compared the country’s inflation to developing economies such as China, Thailand, India, Bangladesh and Sri Lanka, which had all done much better than Islamabad.