Inflation Rate Is at Its Lowest Since November 2015

The inflation rate in Pakistan fell dramatically to 2.9 percent in July when compared to 3.93% in June.

According to Pakistan Bureau of Statistics the inflation rate has reached its lowest level since November 2015.

Pakistan’s Inflation Basket

The following are used to take into account as part of the Consumer Price Index (CPI) to determine inflation rate.

  • Food (Non-perishable food items and perishable food items) and Non-alcoholic beverages
  • Alcoholic beverage and tobacco
  • Clothing and footwear
  • Housing, Water, Electricity Gas, Fuels
  • Furnishing and Household Equipment Maintenance
  • Health
  • Transport
  • Communication
  • Recreation and Culture
  • Education
  • Restaurants and Hotels
  • Miscellaneous

The categories affected the most by inflation in Pakistan include Food (Non-perishable food items and perishable food items) and non-alcoholic Beverage and Housing, Water, Electricity Gas, Fuels.

Month-on-Month Inflation Rate

The month-on-month inflation rate in July fell to 0.34 percent as compared to 0.41 percent of the previous month, CPI fell to 216.9 in July from 215.45 in June.

A stabilized rupee, along with the declining petroleum and food prices resulted in a declining inflation rate.

Food Inflation

Food inflation contributes to 37 pc of the weight in the CPI basket. Its inflation rate from 2016-17 was recorded to be 4.16%. This declined by 0.1 in July this year, as compared to the jump of 2.5pc during the same period last year.

Over a month-on-month basis however, food inflation remained stagnant.

The falling prices of non-perishable food items are what incurred the decline of food inflation.

Non-Food Inflation

Non-food inflation was 5.1% in July as compared to 5% of the previous month. This was because of increased education, health, housing, water, and electricity costs.