Inflation Reaches a 7-Month Low at 10.20 percent - Android

Pakistan’s consumer inflation, which is measured through the Consumer Price Index (CPI), decreased to 10.20% in March 2020 as compared… Read More

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Pakistan’s consumer inflation, which is measured through the Consumer Price Index (CPI), decreased to 10.20% in March 2020 as compared to February 2020. This was the lowest reading in the last seven months, as in August inflation was at 10.50%.

According to the Pakistan Bureau of Statistics, the inflation reading for March was 2.20% lower than February’s 12.40%.

The decrease in inflation was linked to a downfall in the prices of food and energy items.

A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities Pvt told ProPakistani,

The softening is expected to continue over the medium term owing to the decline in energy prices. That said, there are serious risks to food supply chain as masses scramble to buy groceries and food staples for longer than usual in the lockdown for pre Ramzan buying. Globally, several countries are halting exports of food produce to ensure domestic supplies thereby creating upward pressure on global food prices. Nonetheless, we could soon be entering the single-digit inflation territory.

He further stated that the State Bank of Pakistan had already cut rates in anticipation of the softening of inflationary pressures as the government had earlier passed on energy price cuts and tax cuts in food products. Easing may also be on the cards in May, he added.

On a monthly basis, the CPI index increased by 0.04 percent in March compared to a decrease of 1.04 percent in February.

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 was reported at 9.3% on a year-on-year basis in March 2020 as compared to an increase of 11.2% in the previous month and 8.9% in March 2019. On a month-on-month basis, it increased by 0.1% in March 2020 as compared to a decrease of 1.1% in the previous month and an increase of 1.9% in March 2019

CPI inflation Rural was reported at 11.7% on a year-on-year basis in March 2020 as compared to an increase of 14.2% in the previous month and 8.2% in March 2019. On a month-on-month basis, it decreased by 0.1% in March 2020 as compared to a decrease of 1.0% in the previous month and an increase of 2.2% in March 2019.

Price Changes For Individual Items

Main contributors to year-on-year and month-on-month percentage changes are as follows:

Year on Year

Food Items Increased: Potatoes(120.67%), Onions(100.9%), Pulse Moong(72.29%), Pulse Mash(49.43%), Condiments and Spices(34.04%), Vegetable ghee(32.79%), Sugar(31.36%), Beans(29.91%), Cooking oil(29.6%), Gur(28.4%), Pulse Masoor(26.45%), Wheat(24.28%), Fresh Vegetables(20.61%), Cigarettes(19.87%), Pulse Gram(19.76%), Wheat Flour(18%) and Mustard oil(16.15%).

Decreased: Tomatoes (72.94%), Eggs (3.13%) and Chicken (2.41%).

Non-food Items Increased: Water Supply(30.55%), Cotton Cloth(16.53%), Motor Fuels(15.74%), Drugs and Medicines(15.08%), Liquified Hydrocarbons(15.06%), Cleaning & Laundering(13.73%), Motor Vehicles Accessories(13.38%), Dental Services(13.17%) and Solid Fuel(12.72%).

Decreased: Electricity Charges (13.92%)

Month on Month

Food Items Increased: Onions(40.95%), Fresh fruits(8.04%), Potatoes(6.82%), Beans(3.77% and Vegetable ghee(1.05%)

Decreased: Tomatoes(36.43%), Wheat(7.39%), Fresh Vegetables(5.64%), Pulse Gram(5.07%), Chicken(4.85%), Pulse Masoor(3.45%), Eggs(3.17%), Gram Whole(2.58%), Wheat Flour(2.52%), Pulse Mash(2.05%) and Gur(1.02%).

Non-food Items Increased: Footwear (2.93%), Medical Tests(2.7%), Mechanical Services(2.53%), Cotton Cloth(1.88%), Cleaning & Laundering(1.84%), Readymade Garments(1.59%) and Construction Wage Rates(1.43%).

Decreased: Motor Fuels (6.69%) and Transport Services (3.43%)

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