KARACHI, Pakistan (Reuters) – Pakistan’s annual inflation rate rose to 27.4% in August, with prices up 1.7% in August from the previous month, the Pakistan Bureau of Statistics said on Friday.

Economic stabilisation is a top challenge for the South Asian nation as it embarks on a narrow recovery path after a $3 billion bailout from the International Monetary Fund (IMF) averted a sovereign debt default.

Economic reforms have already fuelled record inflation and interest rates, and all-time lows for the rupee.

Pakistan raised petrol and diesel prices to a record high on Friday, with petrol prices rising 14.9 rupees to 305.4 rupees; and diesel prices rising 18.4 rupees to 311.8 rupees.

In June, the Consumer Price Index (CPI) rise was 28.3% year-on-year, coming off a record 38% in May.