The month of October proved to be tough for the citizens of Pakistan who witnessed an increase in prices in the energy sector. As a result of this, inflation reached 7 percent in October 2018.
According to Pakistan Bureau of Statistics, CPI inflation General increased to 7.0% on a year-on-year basis in October 2018 as compared to an increase of 5.1% in the previous month and 3.8% in October 2017.
Higher gas prices and impact of Rupee depreciation against Dollar, along with gaps in the supply and demand of the food items translated into high inflation in the month of October.
According to PBS, following are three major heads of inflation:
- Food Items: Chicken (35.25%), Eggs (14.41%), and Cigarettes (9.67%).
- Non-food Items: Gas (104.91%), Newspapers (15.90%), and Communication & Apparatus (7.54%).
The prices of electricity and petroleum products were increased recently and will reflect in the inflation number of November 2018 which may settle beyond the current rate of 7 percent.
SBP estimated that CPI inflation may surge to 7.5 percent in the current financial year, however, the number is likely to go beyond the projection.
Analysts forecast that the inflation will continue to go up in the current financial year and surge to double-digits. This will also pave way towards a tight monetary policy and high policy rates in the months to come.