Pakistan inflation accelerates to 21.32% in June on costly oil

Pakistan inflation accelerates to 21.32% in June on costly oil
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(July 1): Pakistan’s headline inflation accelerated in June amid higher food and fuel costs even as the nation closes in on a International Monetary Fund bailout.

Consumer prices rose 21.32% last month from a year earlier, according to data released by the government Friday. That compares with a median estimate for a 17.9% gain in a Bloomberg survey of economists and a 13.8% acceleration in May.

The price gain in June could further complicate matters for the country’s central bank that will meet July 7 to review interest rates. Pakistan’s central bank has raised rates by 400 basis points since the beginning of the year to tame rising prices.

A surge in global commodity prices, falling currency and rising import bill has contributed to Asia’s second fastest inflation. Pakistan’s administration has raised domestic fuel prices by up to 92% in a month to meet the IMF’s requirements.

Pakistan is looking to secure funding from other lenders to boost its foreign exchange reserves after the revival of IMF programme. The country needs about US$41 billion in financing for the fiscal year starting July.