Inflation Rate Falls for The 4th Consecutive Month - Android

Pakistan’s consumer inflation, which is measured through the Consumer Price Index (CPI), decreased to 8.20% in May 2020. It recorded… Read More

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Pakistan’s consumer inflation, which is measured through the Consumer Price Index (CPI), decreased to 8.20% in May 2020. It recorded a decrease of 0.3% from April 2020.

The latest drop also means that the inflation rate has decreased for the fourth consecutive month. It is also the second-lowest inflation increase in the last 11 months.

A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities said,

The trajectory is downwards and more so after recent fuel price cut and hopefully, chicken and potatoes prices receding. The Ramadan factor is over and inflation should fall close to 6% in the next few months.

He added that there is space for a last bit of monetary easing but one that would have to be quickly reversed.

Osama Rizvi, an economic and geopolitical analyst, said that the recent fall in the energy bill and lowering interest rates will help stabilize the overall situation.

The CPI on the new base year (2015-16) comprises 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.

CPI inflation Urban increased by 7.3% on a year-on-year basis in May 2020 as compared to an increase of 7.7% in the previous month and 8.5% in May 2019. On a month-on-month basis, it increased by 0.3% in May 2020 as compared to a decrease of 0.7% in the previous month and an increase of 0.7% in May 2019.

CPI inflation Rural increased by 9.7% on a year-on-year basis in May 2020 as compared to an increase of 9.8% in the previous month and 8.3% in May 2019. On a month-on-month basis, it increased by 0.3% in May 2020 as compared to a decrease of 1.1% in the previous month and an increase of 0.5% in May 2019.

CPI National with the base year (2015-16) for the period July-May (2019-20) increased by 10.94 over July-May (2018-19). The Urban CPI with the base year (2015-16) recorded an increase of 10.41% while Rural CPI with the base year (2015-16) recorded an increase of 11.77%.

Price Changes For Individual Items

Top few commodities which varied from previous month i.e. April 2020 are given below:

Urban

Increased: Chicken (41.46%), Potatoes (31.19%), fruits (9.72%), Milk (4.63%), Cotton cloth (4.04%), Condiments and Spices (3.71%), Tailoring (2.53%), Motor vehicle accessories(1.51%), Meat(0.94%), and Construction input items(0.38%).

Decreased: Onions (23.35%), vegetables (19.62%), Eggs (18.74%), Motor fuel (13.43%), Tomatoes (7.74%), Pulse gram (7.25%), Pulse masoor (4.43%), Besan (4.38%), Liquified Hydrocarbons (4.12%) and Wheat (3.37%).

Rural

Increased: Potatoes (41.55%), Chicken (41.15%), fruits (11.46%), Condiments and Spices(8.6%), Pulse Moong (4.36%), Milk (4.23%), Tailoring (2.86%), Gur(2.75%), Pulse Mash (2.13%). Cotton Cloth (1.31%) and Hosiry (1.26%)

Decreased: Tomatoes (21.82%), Onions(21.77%), Motor Fuels (14.01%) and Liquified Hydrocarbons(9.69%)

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