Staff Reporter
Karachi
Jun’20 inflation expected to settle at 8.49 percent YoY compared to 8.00 percent in Jun’19 and 8.22% in May’20, respectively. Analysts expect CPI to increase on the back of drastic surge in prices of Tomatoes, Spices, Eggs and Wheat flour due to higher demand of essential food items along with supply fear of Tomatoes and Wheat in the market.
However, reduction in prices of petroleum products by PKR 7/liter and significant decline in Onions and Fresh vegetables prices kept the inflation contained. This will take the FY20 average inflation to 10.76% compared to 6.80% in FY19.
On a yearly basis, increase in inflation in Jun’20 will likely be led by Alcoholic Beverages & Tobacco (+16.5% YoY), Food (+13.9% YoY), Miscellaneous (+11.1%) and Clothing & Footwear (+10.1%YoY).
On a MoM basis, CPI reading is expected to increase by 0.8% attributable to increase in food index (2.7% MoM). Whereas, decline in Transport and Housing index by 3.7% and 0.4% MoM is expected to cushion the impact of rise in food prices.
This will take average monthly to +0.69% for FY20 compared to -0.52% for FY19. As per Sensitive Price Index (SPI) data published by the Pakistan Bureau of Statistics (PBS), average prices of Tomatoes, Spices, Eggs and Wheat flour are expected to register a jump of 30%, 26%, 19%, and 16% MoM, respectively.
