Pakistan’s consumer price index (CPI)-based inflation rate at a record 24.9 per cent for July will cause serious concerns for the Shehbaz Sharif government. The surge in headline inflation is not just driven by global commodity prices but also the torrential rains, which have caused damage to crops, causing delay in supplies due to broken connectivity. In June, the country’s inflation rate was 21.3 per cent. In July last year it was 8.4 per cent.

“Though the surge in inflation is not surprising– it was expected — especially as the government has increased fuel prices, the rate and quantum of the jump will surely make the administration worried,” an analyst told India Narrative. 

Soaring prices have hit the common Pakistanis the most.

Pakistan based newspaper said that while already struggling over high cost of living owing to soaring utility bills and food items prices, consumers are now faced with massive hike in vegetable prices due to demand and supply gap caused by the torrential rains in Sindh and Balochistan and destruction of road networks and damage to crops in the two provinces.

The growing uncertainties have prompted nations across the globe to focus on strengthening their own macroeconomic fundamentals.

Pakistan’s foreign exchange reserves have also been steadily falling. Data released by the State Bank of Pakistan (SBP) showed the reserves have fallen by $754 million between July 15 and 22. On July 22, the foreign currency reserves held by the country’s central bank stood at $ 8,575.16 million. This has led to serious concerns for the country's policymakers.

In January, it was $16,607 million.

Also read: Why broke Pakistan is finding it difficult to get foreign loans