Inflation rose to 12.7 per cent year-on-year in March and 1.61 per cent month-on-month.
This is the highest inflation under the Consumer Price Index since January 2020, when the rate was 14.6%.
Inflation in urban and rural areas rose to 1.6 percent and 1.63 percent, respectively, according to data shared by the Pakistan Bureau of Statistics.
Deteriorating food items increased inflation by 29.57 per cent, followed by transport by 28.34 per cent and non-perishable food items by 15.02 per cent.
Other sectors that saw double-digit price increases include clothing and footwear (10.84%), furniture and household care (14.66%), health (10.37%), restaurants and hotels (14.57%) and miscellaneous items. And services (12.76%).
In addition, prices of houses and facilities rose by 7.05 per cent, communications by 1.61 per cent, entertainment and culture by 9.65 per cent and education by 8.36 per cent.
According to the Pakistan Bureau of Statistics, inflation and food prices in urban areas increased by 15.98% per annum and in rural areas by 18.23%.
In its April monthly outlook report, the finance ministry said the overall rise in inflation was due to rising import prices as the country was a net importer of commodities, especially crude oil, pulses and edible oil. Prices vary locally. The Russo-Ukrainian war, the disruption of the supply chain and the resumption of global demand all contributed to the rise in prices.
According to the report, the cause of inflation in Pakistan is both external and internal factors. Prices of international commodities, especially oil and food, are important external factors.
Further exchange rate fluctuations also affect prices locally. Large money movements are also considered a useful indicator as they reflect the impact of monetary policy on the domestic price index. Market expectations are also important factors in monetary development.
Due to a combination of internal and external challenges of an unexpected period, the ministry has predicted difficult days ahead for the country.
The report said that changing domestic and international scenarios have implications for economic recovery, while inflation and external sector pressures are creating macroeconomic imbalances in the economy.