Pakistan’s consumer (CPI) inflation rate rose to 9.30% during the first month of the fiscal year FY 20-21, the highest since March. This was the second consecutive month when inflation has increased after decelerating for four consecutive months.
According to the Pakistan Bureau of Statistics, CPI increased by 9.30% in July 2020 as compared to an increase of 8.59% in the previous month and 8.4% in July 2019.
On a month-on-month basis, it increased by 2.5% in July 2020 as compared to an increase of 0.8% in the previous month and an increase of 1.8% in July 2019.
Prices of tomatoes, motor fuels, onions, fresh vegetables, wheat, and eggs increased during the first month of the new fiscal year over the previous month.
A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities told ProPakistani,
The temporary spike is a supply-side shock in the food category. We have seen govt trying to control prices through the import of Sugar & Wheat. However, let’s not expect double-digit CPI in the next few months. The SBP would not be moved yet & chances are tightening is still distant.
State Bank of Pakistan expects that due to the absence of demand-side pressures, average inflation could fall below the previously announced range of 7-9 percent in this fiscal year.
Commenting on the electricity tariff, Soomro said that the increase is under consideration. “It has to happen soon for the IMF program. No way out as Circular debt is mounting upwards.”
The urban CPI inflation increased by 7.8% on a year-on-year basis in July 2020 as compared to an increase of 7.6% in the previous month and 8.7% in July 2019. On a month-on-month basis, it increased by 2.2% in July 2020 as compared to an increase of 0.7% in the previous month and an increase of 2.0% in July 2019.
The rural CPI inflation increased by 11.5% on a year-on-year basis in July 2020 as compared to an increase of 10.0% in the previous month and 7.9% in July 2019. On a month-on-month basis, it increased by 2.9% in July 2020 as compared to an increase of 1.0% in the previous month and an increase of 1.6% in July 2019.
The CPI on a new base (2015-16) comprises of urban CPI and Rural CPI. Urban CPI covers 35 cities and 356 consumer items. The Rural CPI covers 27 Rural Centers and 244 consumer items. In the new base year (2015-16) National CPI for 12 major groups is also computed by taking a weighted average of Urban CPI and Rural CPI.
Top few commodities which varied from previous month i.e. June 2020 are given below:
The following items recorded an increase in prices:
Increased: tomatoes (179.19%), motor fuel (27.01%), vegetables (23.84%), onions (16.61%), eggs (10.82%), spices (7.57%), wheat (7.42%), potatoes (4.58%), meat (3.97%), sugar (3.82%), beans (3.07%), cigarettes (2.88%), chicken (2.6%), milk products (1.74%), house rent(1.58%), milk (1.37%) and medicines (1.04%).
The following items’ prices decreased in the period:
Pulse moong (10.72%), transport (7.55%), pulse masoor (6.27%), fruits (6.24%), pulse mash (2.71%), gram whole (2.7%), pulse gram (2.39%), wheat flour (1.51%) and cooking oil (1.34%)
The prices increased for the following items:
Tomatoes (241.4%), motor fuels (29.61%), onions(25.57%), vegetables (21.63%), eggs (13.84%), wheat (10.84%), potatoes (5.33%), sugar (3.67%), plastic products (3.49%), rice (2.96%), chicken (2.58%), household equipment (2.47%), cotton cloth (2.45%), honey (2.06%), meat (1.82%), bakery and confectionary (1.74%), house rent (1.7%), wheat flour(1.73%), readymade food (1.72%), condiments and spices (1.48%), beans (1.47%), milk fresh (1.23%).
These items saw their prices fall:
Pulse moong (13.42%), fresh fruits (6.62%), transport services (5.17%), pulse gram (4.98%), besan (4.42%), pulse masoor (4.06%), pulse mash (4.04%) and gram whole (4%).