Jan’ 20 inflation settled at 14.56pc YoY, highest in 10 Years

715

Zubair Yaqoob

Karachi

As per the Pakistan Bureau of Statistics (PBS), CPI for the month of Jan’20 clocked-in at 14.56% YoY (this level previously observed in Nov’09) compared to 5.6% YoY in Jan’19 and 12.63% in Dec’19, respectively. This took the 7MFY20 average inflation to 11.60% against 5.90% during 7MFY19. During the period under review, increase in monthly headline inflation was primarily led by Food Index (+3.39% MoM) due to increase in prices of non-perishable food items specially Pulses (Moong/Gram/Mash), Eggs and Chicken.
On the other hand, housing index increased by 1.92% MoM on account of quarterly house rent index which increased by 2% along with jump in LPG prices by 22% MoM on the back of higher demand in winter season. Likewise, Transport index also increased by 1% MoM due to increase in prices of petroleum products. Meanwhile, Urban and Rural inflation settled at 13.41% YoY and 16.34% in Jan’20.
Uptick in Consumer Price Index reading stems from Food, Transport, Alcoholic Beverages, and Health, depicting an increase of 23.7%, 18.6%, 17.9%, and 11.8% YoY, respectively. Commodities that led the inflationary trend include Tomatoes (+158% YoY), Onions (+125% YoY), Fresh Vegetables (+94% YoY), Potatoes (+87% YoY), Pulse Moong (+79% YoY), and Gas Charges (+55% YoY). On a MoM basis, inflation jumped by 1.97% in Jan’20 compared to -0.34% in Dec’19 and +0.30% in Jan’19.
This took average monthly inflation to +1.28% in 7MFY20 compared to +0.46% in 7MFY19. Increase in inflation was primarily owing to Food index which increased by 3.39% MoM. On a monthly basis, major price increase was witnessed in Pulse Moong, Pulse Gram, Chicken, Eggs, and Wheat by 20%, 18%, 18%, 14% and 13%, respectively. Inflation is expected to remain elevated in upcoming months on account of regular adjustment in electricity price (fuel cost adjustment and base tariff hike), expected increase in gas tariff by 15-18% which will be effective from 1st Feb’20, and massive increase in prices of non-perishable food items.
However, decline in prices of some key commodities due to government allowing import of wheat and sugar along with arrival of new crop of tomatoes will ease inflationary pressure in upcoming months. We expect Feb’20 inflation in the range of 13.5-13.8%.

Previous articleCCoP allows open auction bidding for 27 state properties
Next articleEhsaas determined to reshaping women entrepreneurship