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Inflation Declines to 26.9% in October

Average inflation has declined since May peak of 38 percent, but remains higher than government target of 21 percent for ongoing fiscal year

by Staff Report

File photo. Narinder Nanu—AFP

Pakistan’s inflation rate in October declined to 26.9 percent, the lowest since last December, according to the monthly consumer price index (CPI) bulletin issued by the Pakistan Bureau of Statistics (PBS).

However, the decline is likely partly attributed to the four-month high of 31.4 percent recorded in September, largely due to the impact of hikes to utility tariffs and fuel prices. It is also the result of a substantial drop in food inflation to a 16-month low of 26.8% compared to 33.1% in September. The October inflation rate is also significantly higher than the 21 percent target set by the government for the ongoing fiscal, suggesting the reduction is slower than estimated.

According to the PBS data, inflation remains elevated in rural areas compared to urban regions. It states that CPI inflation spiked by 25.5% year-on-year in October 2023 compared to 24.6% in October 2022. By contrast, the CPI inflation in rural areas increased to 28.9% year-on-year in October 2023 compared to 29.5% in October 2022.

However, the sensitive price index (SPI), which assesses price movement of essential commodities, increased to 34.2% year-on-year in October 2023 compared to 24% in October 2022. Core inflation, which excludes food and energy components, stood at 18.5% in October 2023, against 18.6% in September and 18.4% in August. The wholesale price index (WPI), measuring producer prices, climbed to 24.6% in October from 26.4% in September.

Urban areas

The PBS data shows that, on a monthly basis, the prices of onions in urban areas increased by 38.71%; fresh vegetables (17.74%); fresh fruits (6.49%); eggs (6.05%); potatoes (3.72%); fish (3%); condiments and spices (2.87%); beans (1.51%); and nimco (1.38%). At the same time, it said, the prices of sugar decreased by 10.23%; pulse gram (3.71%); tomatoes (3.11%); mustard oil (2.33%); pulse moong (2.05%); gur (1.88%); wheat flour (1.87%); fresh milk (1.73%); tea (1.67%); wheat (1.66%); vegetable ghee (1.61%); besan (1.60%); pulse masoor (1.59%); cooking oil (1.54%); gram whole (0.88%); wheat products (0.79%); pulse mash (0.37%); and chicken (0.13%).

In non-food categories, the PBS states urban areas saw an 8.29% increase to electricity charges; marriage hall charges (5.43%); accommodation services (4.50%); liquefied hydrocarbons (3.87%); drugs and medicines (3.72%); education (3.23%); doctor clinic fee (3.02%); woolen readymade garments (2.36%); therapeutic appliances and equipment (2.33%); electrical appliances for personal use (1.97%); furniture and furnishing (1.96%); and woolen cloth (1.89%). By contrast, the prices of motor fuel decreased by 4.02%; transport services (1.56%); and construction inputs (0.97%).

Rural areas

According to the PBS, on a monthly basis, the prices of onions increased by 33.96% in rural areas; fresh vegetables (21.76%); beans (5.14%); potatoes (4.23%); condiments and spices (3.65%); fish (3.63%), fresh fruits (3.40%); sweetmeat (3.37%); eggs (2.84%); dry fruits (2.34%); butter (2.23%); meat (1.93%); and readymade food (1.85%). Meanwhile, the prices of sugar decreased by 9.47%; gur (5.72%); vegetable ghee (4.31%); cooking oil (3.83%); tomatoes (3.28%); pulse gram (2.98%); chicken (2.64%); pulse moong (2.21%); wheat flour (2.15%); gram whole (1.44%); wheat (1.26%); mustard oil (1.17%); tea (1.00%); besan (0.99%); rice (0.69%) and wheat products (0.18%).

In non-food categories, the PBS said, rural areas had seen increases to electricity charges by 8.29%; doctor clinic fees (4.37%); footwear (3.69%); medical tests (3.39%); drugs and medicines (3.00%); furniture and furnishing (3.00%); washing soaps, detergents and match boxes (2.59%); stationery (2.06%); appliances/articles/products for personal care (1.84%); house rent (1.65%); major tools and equipment (1.53%); woolen readymade garments (1.53%); household textiles (1.46%); tailoring (1.26%); recreation and culture (1.11%); hosiery (1.09%); cleaning and laundering (1.05%); solid fuel (1.04%); and woolen cloth (1.02%). Only personal effects (2.70%) and transport services (0.84%) witnessed any decline in prices.

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