Inflation in 2021: Has Pakistan really fared better than other countries? compared inflation in Pakistan with five other countries including India and Bangladesh to see where we stood.
Published December 31, 2021

Sugar. Wheat. Petrol. Price hikes one after the other. Pakistanis have acutely felt the effects as the country's inflation, measured by the Consumer Price Index (CPI), increased to its highest level in 20 months this November.

The government has faced unrelenting criticism and the opposition has taken out multiple rallies across the country — the Pakistan Democratic Movement (PDM) has already planned a "huge demonstration" for next year too. The protests were not limited to the political parties either, lawyers in Sindh and Khyber Pakhtunkhwa also boycotted courts to demonstrate against price hikes.

While acknowledging the hardships faced by the inflation-hit public, the government has stuck to one stance throughout — Pakistan has fared "relatively better" than other countries.

But, is this really true? reached out to experts to see how a comparative analysis could be done to evaluate the government's stance.

The methodology

Business journalist Khurram Husain said Pakistan's situation should be compared to other regional countries like those in the South Asian Association for Regional Cooperation (Saarc) — Afghanistan, India, Bangladesh, Maldives, Sri Lanka, Bhutan and Nepal — because they have similar economies.

Comparing Pakistan to countries like Turkey and Brazil does not make sense because their economies are very different, he said.

Pakistan Initiative at Atlantic Council's South Asia Centre Director and host of the Pakistonomy podcast Uzair Younus shared a similar view. "Regional is always a better indicator," he said, adding that Pakistan's economy could also be compared to those of Nigeria and Vietnam because they have a similar GDP per capita.

Younus said the Consumer Price Index (CPI) — a measure of the variation in the prices paid by general consumers for a specific basket of goods and services — and the food sub-indices of these countries could be compared to get an idea of how they fared on this front.

To gauge Pakistan's place among other countries, decided to compare it with three regional peers — India, Bangladesh, Sri Lanka — and Vietnam and Nigeria.

For these countries, we looked at the overall CPI and food CPI for each month, starting from November 2020 to the most recent available data.

While the basket of goods included in the CPI varies from country to country and so does the weightage given to goods — such as perishable food items, non-perishable food items, housing and transport — it is nonetheless a good indicator of the situation in each country.

CPI: Pakistan tops regional peers

We start off with simply comparing each country's Nov 2020 CPI value with Nov 2021 (for Bangladesh, data was available till Oct 2021) and calculate the percentage change. For instance, Pakistan's CPI in Nov 2020 was 141.83, while in Nov 2021 it was 158.18. This translates into an increase of 11.53 per cent.

Among regional peers, Pakistan's rise in CPI was the steepest and second only to Nigeria among the six countries under review. The West African country saw its CPI jump 15.39 per cent.

The other countries analysed for this piece saw the increase in CPI limited to single digits: Sri Lanka at 9.92pc, Bangladesh at 6.50pc, India at 4.91pc with Vietnam seeing a rise of 2.10pc.

However, comparing change over just two months (last November and this November) may mislead us if the CPI for one of the two months in question was unusually low or high due to any reason. Therefore, to get a wholistic view of the entire year and to make sure that figures for Nov 2020 and Nov 2021 were not outliers for any country, we looked at the CPI trend in each country from Nov 2020 to Nov 2021.

These trend lines show that the CPI dipped slightly at the end of 2020 for Pakistan, India and Bangladesh. But soon after the start of the new year, the indices started rising again for all three. These three countries, along with Sri Lanka (all four are from the same region), have seen a steeper increase (compared to the rest of the year) in their CPIs since Aug 2021, which seems to be in line with the global situation.

On the other hand, Nigeria saw its CPI rise by at least four points each month while Vietnam's increase was not very marked throughout the year and its trend line is comparatively flat.

Nonetheless, these lines indicate that Nov 2020 and 2021 figures, which we have used to calculate the percentage increase in CPI for each country over 12 months, are not outliers and therefore reiterate our earlier ranking.

Food inflation – Pakistan ranks 3rd

As for the food sub-index, a comparison of Nov 2020 values with Nov 2021 showed the highest rise in Sri Lanka at 17.45pc, followed closely by Nigeria at 17.20pc. Pakistan came in third at 10.47pc.

Bangladesh and India saw their food CPIs rise in single digits, 6.63pc and 1.87pc, respectively. Vietnam was the only country out of the six where the food sub-index did not rise, instead, it went down by 0.08pc.

Much like the overall CPI, Pakistan and India saw a reduction in their food sub-indices up to January 2021 whereafter they started rising. These countries, along with Bangladesh and Sri Lanka, saw their biggest increases from September onwards.

Nigeria, once again, saw a constant rise in its food CPI. Vietnam saw its sub-index fluctuate throughout the period under review but it never went either way by more than 1.7 points.

Pakistan follows regional trend but numbers higher

This data shows that Pakistan's CPI does follow a trend similar to other regional countries and gives some credence to the government's claim that this current wave of inflation is a global phenomenon.

But it clearly negates the claim that Pakistan has fared better than other regional countries, particularly India and Bangladesh. As calculated above, overall, prices in Pakistan have seen the highest increase among the regional countries analysed. Only Nigeria's rise in CPI is higher than Pakistan's in this dataset.

In terms of food inflation, Pakistan's sub-index rose by 10.47pc, placing it second in the region, behind only Sri Lanka (17.45pc). India, despite facing a farmers' protest that went on throughout the year, was able to keep food prices under check with a food CPI rise of only 1.87pc; Bangladesh's food CPI rose 6.63pc.

Data has been taken from the Pakistan Bureau of Statistics, India's Ministry of Statistics and Programme Implementation, Bangladesh Bureau of Statistics, Sri Lanka's Department of Census and Statistics, Central Bank of Sri Lanka, General Statistics Office of Vietnam and Nigeria's National Bureau of Statistics.

Header image by Mushba Said.