Pakistan inflation rises to 48-year high as IMF visits

Year-on-year inflation in January 2023 was recorded at 27.55%, the highest since May 1975, with thousands of containers of imports held up at Karachi port

Inflation has risen to a 48-year high in crisis-hit Pakistan, where the International Monetary Fund is visiting for urgent talks, according to data released on Wednesday by the country's statistics bureau.

Year-on-year inflation in January 2023 was recorded at 27.55%, the highest since May 1975, with thousands of containers of imports held up at Karachi port.

Pakistan's economy is in dire straits, stricken by a balance of payments crisis while it attempts to service high amounts of external debt.

The world's fifth-biggest population has less than $3.7 billion in the state bank – enough to cover just three weeks of imports.

On Tuesday, an IMF delegation arrived in Islamabad to revive negotiations over a stalled bailout package with the government, which has so far held out from meeting the global lender's tough conditions.

But in recent days, with the prospect of national bankruptcy looming and no friendly countries willing to offer less painful bailouts, Islamabad has started to bow to pressure.

The government loosened controls on the rupee to rein in a rampant black market in U.S. dollars, a step that caused the currency to plunge to a record low. Artificially cheap petrol prices have also been hiked.