In October, consumer inflation surged due to increasing gasoline and food costs, placing greater pressure on the central bank to keep prices in check despite a sluggish economic recovery.
According to statistics released by the Pakistan Bureau of Statistics (PBS) on Monday, consumer price index (CPI) inflation increased 9.2 percent year on year (YoY) in October 2021, mostly due to a persistent rise in food basket, energy, and home rent indices.
In September 2021, the rise was 8.98 percent, and in October 2020, it was 8.91 percent. It increased 1.90 percent month over month in October 2021, compared to a rise of 2.1 percent the previous month and a gain of 1.7 percent in October 2020.
Cumulatively, CPI-based inflation rate in the first months of this fiscal year average at 8.84 percent, slightly down from 8.87 percent in the same period last fiscal. The food inflation having 35 percent weight in CPI basket increased 8.30 percent and transportation index by 14.50 percent. “High food and energy prices contributed mainly along with surge in housing index to push CPI above 9 percent,” said Tahir Abbas, head of research at Arif Habib Limited.
The federal government had set an average inflation target of 8 percent. The CPI is a basket of goods monitoring retail prices of 374 items in 35 major cities. According to PBS, consumer inflation stood at 9.6 percent in urban areas and 8.7 percent in rural areas of the country.
In CPI basket, food and beverages index rose 8.30 percent in October of this fiscal compared to the same month of last year, whereas transport index registered 14.41 percent growth in the month under review compared to corresponding month of last year.
The food inflation surged mainly on the back of rising prices of wheat, meat, sugar, rice, chicken, milk etc. Among other indices in CPI basket, clothing and footwear index registered 9.28 percent growth in October compared to the same month last year. Whereas housing, water, gas, electricity, and fuels index increased 11.96 percent in the month under review compared to corresponding month of previous year. Health index registered an increase of 7.96 percent, while transportation group rose 14.41 percent in the period under review compared to same month last year.
Education expenses also showed upward trend by registering 2.21 percent growth in the period, compared to October FY21. Restaurants and hotel group also increased 8.25 percent compared to same month a year ago, whereas recreation and culture expenses also went up 7.48 percent over the same month last year. Finishing and household maintenance group registered a jump of 9.18 percent in October of this fiscal compared to same month of the previous year.
The Wholesale Price Index (WPI) and Sensitive Prices Index (SPI) in October increased 17.85 percent and 14.01 percent respectively compared to October 2020.