Observer Report
Islamabad
The inflation rate eased to 8.2% in August – the lowest in three months – due to reduction in prices of perishable food items amid the government’s decision to quietly increase electricity prices by 11.6% last month.
Measured by the Consumer Price Index, the average rate of increase in prices of goods and services stood at 8.21% in August, reported the Pakistan Bureau of Statistics. Last time the inflation reading had remained at 8.2% in May. The national data collecting agency has reported the latest inflation figures ahead of the Monetary Policy Committee meeting this month that will set the new policy for the next two months.
The 8.2% inflation in August was lower than the federal government’s expectations that had predicted that inflation would remain in the range of 8.4% to 9.7% in August. In July, the reading was 9.3%. The official PBS bulletin also revealed an 11.6% increase in electricity prices in August over the previous month. An official of the PBS said the increase was on account of monthly fuel price adjustment, notified by the National Electric Power Regulatory Authority.
However, last week, the Economic Coordination Committee of the cabinet did not take the decision to increase electricity prices on account of fuel price adjustment. The PBS inflation numbers also showed an 18 paisa increase in prices of electricity for the lifeline consumers, consuming up to 50 units a month.
Core inflation, measured by excluding food and energy goods from the commodities’ basket, inched up to 5.6% in August over July reading of 5.3% in urban areas, according to the PBS. In rural areas, the core inflation dropped from 7.8% to 7.6% in August. Food inflation in urban areas decreased from 15.1% in July to 11.3% in August. In rural areas, it fell from 17.8% to 13.5%, reported the data collecting agency.
