Inflation has risen to a 48-year high in crisis-hit Pakistan, according to government data released on Wednesday, as IMF officials visit for urgent talks on a stalled bailout package.

Year-on-year inflation in January was recorded at 27.55 per cent, its highest since May 1975.

Pakistan’s economy is in dire straits, stricken by a balance of payments crisis as it attempts to service high levels of external debt, amid political chaos and a deteriorating security situation.

The world’s fifth most populous country has less than $3.7 billion in its central bank -- enough to cover just three weeks of imports.

On Tuesday, a delegation from the International Monetary Fund arrived in Islamabad to revive negotiations over a stalled bailout package with the government, which had long held out from meeting the global lender’s tough conditions.

Food prices rose by a staggering 43 per cent in January year-on-year, which analyst Yousuf Nazar based in Britain described as a “killer”.

“The overall rate actually masks or understates the misery of the people, and what is really going on behind these numbers,” he told AFP.

“It also reflects badly on the management -- on the managers of the economy.” In the past week, with the prospect of national bankruptcy looming and no countries willing to offer less painful bailouts, Islamabad has started to bow to pressure to meet IMF demands.

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

The state bank is no longer issuing letters of credit, except for essential food and medicines, causing a backlog of thousands of shipping containers at Karachi port stuffed with stock the country can no longer afford.

Industry has been hammered by the imports block and massive rupee devaluation. Public construction projects have halted, textiles factories have partially shut down and domestic investment has slowed.

The National Consumer Price Index for January rose by 2.88 per cent from the previous month, the figures released by the country’s statistics bureau on Wednesday showed.

In downtown Karachi on Monday, dozens of day labourers including carpenters and painters waited with their tools on display for work that never comes.

“The number of beggars has increased and the number of labourers has decreased,” said 55-year-old mason Zafar Iqbal, who was eating biryani from a plastic bag donated by a passerby.

“Inflation is so high that one cannot earn enough.” Former prime minister Imran Khan, who was ousted last year in a no-confidence motion, negotiated a multi-billion-dollar loan package from the IMF in 2019.

But he reneged on promises to cut subsidies and market interventions that had cushioned the cost-of-living crisis, causing the programme to stall.

It is a common pattern in Pakistan, where most people live in rural poverty, with more than two dozen IMF deals brokered and then broken over the decades.

Pakistan’s consumer price index rose 27.5% year-on-year in January, the statistics bureau said on Wednesday, underscoring consistently high inflation amidst economic turmoil in the South Asian nation.

Pakistan’s economy has reeled from a sharp currency deprecation and foreign currency reserves have fallen to cover just three weeks of imports. Floods also devastated the country in August last year.

Prices were up 2.9% in January from the previous month, the pakistan Bureau of Statistics (PBS) said in a statement. In December, the CPI rose 24.5% on year.

Arif Habib Limited, a Karachi-based investment firm said year-on-year inflation was the highest since May 1975, which saw a rise of 27.8%.

Mohammed Sohail, CEO at local brokerage firm Topline Securities, said the inflation statistics were expected after the pakistani rupee’s fall over the last few days, the removal of subsidies and rising taxes.

“This takes average inflation for the seven months of the current fiscal year to 25.4% compared to 10.3% in the same period last year,” Sohail said.

Urban core inflation rose 15.4% year-on-year, and 1.4% from December, while rural core inflation rose 19.4% compared to last year, and 1.5% compared to last month. pakistan’s central bank highlighted rising core inflation as a concern and a reason for hiking policy rates.

Pakistan’s finance ministry said in its monthly outlook released on Tuesday that inflation for January was forecast in the range of 24%-28%, citing supply-side factors and economic and political uncertainty.

Food inflation increased by 42.9% year-on-year, and by 5% over the last month. While perishable items were up 61.6% over the last year, their prices fell 1.76% from December 2022, PBS said.

The country is negotiating with the International Monetary Fund to try to unlock bailout funds to assist its struggling economy.