Pakistan's headline inflation rate side-by-side with the US CPI inflation rate.
Pakistan's headline inflation rate side-by-side with the US CPI inflation rate.
▸Pakistan rose 21.2% over the selected period — from 9.66% to 11.70%.
▸United States fell 21.3% over the selected period — from 5.30% to 4.17%.
▸Over this period, Pakistan and United States showed a moderate relationship, moving in the same direction (correlation coefficient: 0.33).
Sources: SBP EasyData & FRED
The inflation differential between Pakistan and the US is one of the structural forces behind long-run Rupee depreciation — persistently higher Pakistani inflation tends to erode the Rupee's value relative to the Dollar over time.
Why is Pakistan's inflation usually so much higher than the US's?
Higher energy import dependence, currency depreciation feeding into import costs, larger fiscal deficits, and a less diversified economy all contribute to Pakistan running structurally higher inflation than the US.
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