Wheat flour at Rs64.75 per kilogram simply isn't available anywhere
In September 2022, Pakistan's official inflation figures offered the world a story of modest relief — a headline rate falling from 27.3 to 23.18 percent — but the numbers beneath that headline told a different story about the distance between statistical governance and lived reality. The methodology anchored its electricity calculations to a consumer category that scarcely exists, while wheat flour prices in official records bore almost no resemblance to what families paid at market stalls. In a nation under IMF scrutiny, with a history of penalized data manipulation, the question of whether economic statistics serve the truth or serve the moment carries consequences far beyond any single index point.
- Pakistan's September inflation appeared to fall sharply, but the drop was engineered almost entirely around a tariff cut affecting only households consuming fewer than 50 electricity units monthly — a category so rare it barely registers in real life.
- Wheat flour, a staple for millions, was officially priced at Rs64.75 per kilogram while markets in Islamabad, Lahore, and Rawalpindi sold the same flour for Rs108 to Rs113 — a 96 percent understatement that no official explanation could reconcile.
- Food inflation actually rose to 31.7 percent, transportation surged 64.5 percent year-over-year, and core inflation climbed in both urban and rural areas — yet the headline number moved in the opposite direction, straining credibility.
- Eight million households had already been stripped of electricity subsidies in August 2022, yet the official utilities index showed costs plummeting — a contradiction that analysts found impossible to square with household budgets.
- With Pakistan operating under an IMF program and a prior record of fines for falsified statistics, the gap between reported data and market reality raised urgent questions about whether the numbers being sent to international creditors reflected the economy or managed it.
Pakistan's official inflation figures for September 2022 announced a meaningful decline — from 27.3 percent to 23.18 percent — crediting a 65 percent electricity tariff cut as the primary driver. On the surface, it looked like progress. Beneath it, the methodology raised serious questions about whether the statistics reflected what ordinary Pakistanis were actually paying.
The electricity calculation was built around lifeline consumers using fewer than 50 units per month — a category that barely exists in practice. The bureau quoted electricity at Rs6.43 per unit, down from Rs9.38, while ignoring a base tariff increase and monthly fuel charge adjustments that had raised bills for the vast majority of households. In August, roughly 8 million households had been expelled from subsidy programs entirely, yet the utilities component of the index showed costs falling sharply.
The wheat flour figures were even harder to reconcile. The bureau reported flour at Rs64.75 per kilogram in major cities. In the actual markets of Islamabad, Rawalpindi, Lahore, and Faisalabad, the same flour sold for Rs108 to Rs113 — a gap of nearly 96 percent. A 20-kilogram bag priced officially at Rs1,095 was openly available for Rs2,150 to Rs2,250. The bureau's spokesman defended the methodology, citing fixed retailers and fixed collection days, and denied any intentional distortion.
Across other categories, the strain was unmistakable. Food inflation rose to 31.7 percent. Transportation costs climbed 64.5 percent year-over-year. Tomatoes surged 128 percent. Core inflation — stripping out food and energy — increased to 14.4 percent in urban areas and 17.6 percent in rural areas, even as the central bank had more than doubled its discount rate to 15 percent. Independent economists cautioned that this was cost-push inflation driven by supply shocks and currency depreciation, meaning higher interest rates would suppress growth without addressing the underlying pressures.
The broader concern was institutional. Pakistan was operating under an IMF program, and the Fund had previously penalized the country for submitting falsified data. With the wholesale price index climbing to 38.9 percent at the producer level, the distance between official consumer figures and market reality invited uncomfortable questions about whether the numbers being reported to international creditors were shaped by what the economy required — or by what the program demanded.
Pakistan's official inflation figures for September told one story to the world, but a closer look at the numbers revealed something far more troubling underneath. The Pakistan Bureau of Statistics announced that consumer price inflation had fallen to 23.18 percent in September 2022, down from 27.3 percent the month before—a decline the government credited largely to a 65 percent cut in electricity tariffs. On the surface, it looked like relief. But the methodology behind that calculation raised serious questions about whether the numbers reflected what ordinary Pakistanis were actually paying for the things they needed to survive.
The electricity tariff reduction, the centerpiece of the government's explanation, applied only to lifeline consumers—those using fewer than 50 units per month. The Pakistan Bureau of Statistics quoted electricity at Rs6.43 per unit in September, down from Rs9.38 the previous month. The problem was stark: virtually no household in Pakistan consumes fewer than 50 units monthly. The bureau had built its entire national electricity cost calculation around a consumer category that barely exists. Meanwhile, it ignored the Rs7.91 per unit increase in base tariff that had been announced and the monthly fuel charge adjustments that added billions to bills. The 50-unit consumers were already shielded from these increases by government policy, making their tariff irrelevant to measuring what most people actually paid. In August, the government had also ended electricity subsidies for millions of consumers, expelling roughly 8 million households from the subsidy program and raising their bills substantially. Yet the overall inflation index showed utilities declining sharply.
The wheat flour numbers told an even starker story. The Pakistan Bureau of Statistics reported wheat flour at Rs64.75 per kilogram in major cities including Islamabad, Rawalpindi, Lahore, and Faisalabad. In the actual markets of Islamabad and Rawalpindi, the same flour was selling for Rs108 to Rs113 per kilogram—a 96 percent understatement. A 20-kilogram bag that the bureau priced at Rs1,095 was selling openly for Rs2,150 to Rs2,250. There was no market in the country where flour could be found at the government's reported price. The Punjab Atta Chakki owners had just raised prices by Rs8 per kilogram, yet the official statistics showed flour becoming cheaper. When asked about the discrepancy, Attiqur Rehman, the official spokesman for the Pakistan Bureau of Statistics, said the bureau collected data every Thursday from fixed retailers and fixed products and could not change its methodology. When pressed on whether the understatement was intentional, he denied any such intention.
The broader inflation picture showed the strain across nearly every category. Food inflation, which carries over one-third of the weight in the CPI basket, had actually jumped to 31.7 percent from 29.5 percent. Transportation costs rose 64.5 percent year-over-year. Tomato prices climbed 128 percent compared to September 2021. Pulses, cooking oil, vegetables, wheat, eggs, and tea all surged. Yet somehow, when utilities were weighted into the calculation, the overall headline inflation appeared to drop. The government claimed that house rent, water, electricity, gas, and fuel inflation had plummeted from 27.57 percent to 3.37 percent—a decline so dramatic it seemed to defy the reality that households were spending roughly a quarter of their income on these essentials, making them the second-largest contributor to the CPI.
Core inflation, which strips out food and energy, had actually increased to 14.4 percent year-over-year in urban areas and 17.6 percent in rural areas. This posed a challenge for Pakistan's central bank, which had more than doubled its discount rate from 7 percent in July 2021 to 15 percent by September 2022. Independent economists warned that this inflation was cost-push rather than demand-pull—driven by supply shocks and currency depreciation rather than excess consumer spending—meaning that raising interest rates would not solve the problem but would instead damage economic growth.
The timing added another layer of concern. Pakistan was operating under an International Monetary Fund program, meaning the data it released was subject to IMF monitoring. The Fund had previously fined Pakistan for submitting falsified statistics. The gap between what the bureau reported and what people encountered in markets raised questions about whether the numbers being submitted to international creditors reflected economic reality or were being shaped to meet program requirements. The wholesale price index, which measures inflation at the producer level, had climbed to 38.9 percent, suggesting that the consumer price figures might not be capturing the full scope of price pressures moving through the economy.
Citas Notables
We collect data every Thursday from fixed retailers and fixed products, we cannot change it. We have also special numerators for collection of data.— Attiqur Rehman, spokesman, Pakistan Bureau of Statistics
Since this inflation is cost-push instead of demand-pull, it will not serve the purpose but hit the country's GDP growth.— Independent economists quoted in the report
La Conversación del Hearth Otra perspectiva de la historia
Why would the government use electricity prices for consumers using fewer than 50 units when almost nobody uses that little?
Because it made the headline number look better. Those lifeline consumers were already protected from the tariff increases, so their price didn't reflect what most people actually pay. It's like measuring national car prices by only looking at vehicles that cost under $5,000.
But the spokesman said they collect data from fixed retailers every Thursday. Doesn't that sound like a reasonable methodology?
It would be, except the fixed retailers they're sampling from apparently don't exist in the real market. Wheat flour at Rs64.75 per kilogram simply isn't available anywhere. You can walk into any market in Islamabad and find it for double that. At some point, methodology becomes a cover for numbers that don't match reality.
If food inflation went up and utilities supposedly went down, how does the overall number go down?
Because utilities carry enormous weight in the basket—people spend about a quarter of their income on rent and electricity. If you artificially suppress that number, it drags down the whole index, even when everything else is getting more expensive.
What happens if the IMF finds out the data is wrong?
They've fined Pakistan before for submitting fudged statistics. But this time, Pakistan is in a program with them, which means the Fund is monitoring the data as it comes in. The question is whether they're looking closely enough to see the gap between what's reported and what's actually happening in markets.
Does this mean the real inflation is higher than 23.18 percent?
Almost certainly. When you look at what people are actually paying for food, fuel, and utilities, the pressure is much greater than the official number suggests. The real cost of living has moved faster than the statistics acknowledge.