Tag: inflation in pakistan

  • Pakistan’s inflation drops to 6.9%, lowest since January 2021

    Pakistan’s inflation drops to 6.9%, lowest since January 2021

    Pakistan’s inflation has dropped to lowest level since August 2021, according to latest data released by the Pakistan Bureau of Statistics (PBS).

    Shockingly, the headline inflation in Pakistan was recorded at 6.9 per cent on a year on year (YoY) basis in the previous month.

    This CPI reading marks the lowest level recorded in over three years.

    Experts believe that this level is an outcome of aggressive monetary tightening. The State Bank of Pakistan (SBP) has achieved bringing inflation below the one-year target of 7 per cent ahead of time.

    CPI inflation dropped 0.5 per cent in September 2024 as opposed to a rise of 0.4 per cent in the previous month and an increase of 2.0 per cent in September 2023.

    Analysts are of the view that  inflation is declining due to multiple factors, which include high base effect, sliding global commodity and energy rates, and our very stable home unit.

    Interestingly, the latest inflation reading is also lower than government expectations.

    The finance division had projected inflation to decelerate further in the next two months (September-October), and hover around 8 to 9 per cent, in the monthly economic outlook released last week.

  • Finance Division forecasts 8-9% inflation for September

    Finance Division forecasts 8-9% inflation for September

    Pakistan’s headline inflation may drop to 8-9 per cent in the next two months, according to the finance ministry.

    In a recent economic update, the finance division said that the Consumer Price Index (CPI) based inflation in the country has come down to single digits. This is the lowest level recorded in almost 14 months.

    Experts had earlier predicted that the inflation will drop to single digits soon with further decline expected in the coming months.

    Last month, CPI-based inflation was seen at 9.6 per cent on an annual basis. This represents a massive decline from the from 27.4 per cent recorded in August 2023.

    The finance ministry also noted positive indicators in the first two months of ongoing fiscal year in its recently released monthly report, confirming that the industrial output has increased, and big exporting sectors have also recorded notable growth.

    Moreover, the current account deficit has shrunk due to strategic measures taken by the government.

    The finance division expcts the trajectory to continue in the upcoming months.

  • Pakistan’s inflation expected to drop to as low as 9% by September 2024: Finance Ministry

    Pakistan’s inflation expected to drop to as low as 9% by September 2024: Finance Ministry

    Pakistan’s headline inflation is expected to ease further in August 2024, settling between 9.5 per cent and 10.5 per cent, with a continued downward trend anticipated in the coming months, according to the Finance Division’s statement on Friday.

    The Ministry of Finance, in its ‘Monthly Economic Update and Outlook’, highlighted that the inflation rate could drop even further to between 9 per cent and 10 per cent by September 2024, attributed to the stabilisation of key economic indicators.

    July 2024 saw headline inflation at 11.1 per cent year-on-year, a decrease from 12.6 per cent in June 2024. This marks the lowest Consumer Price Index (CPI) figure since November 2021, when inflation was recorded at 11.5 per cent, as per data from the Pakistan Bureau of Statistics (PBS).

    The Finance Ministry’s report also pointed to positive trends in external indicators such as exports, imports, and workers’ remittances, which are on an upward trajectory.

    A brokerage house noted that August’s inflation figure is expected to dip into single digits for the first time in nearly three years.

    Read more: Exchange rates: PKR up by over 10 paisa against dollar

    Looking ahead, the report projects that exports will range between $2.5 billion and $3.2 billion, imports between $4.5 billion and $5 billion, and remittances between $2.6 billion and $3.3 billion in August 2024.

    The stable outlook for the external sector is contingent upon factors including a stable exchange rate, revived domestic economic activities, improved agricultural output, lower domestic and global commodity prices, and increased foreign demand.

    In the industrial sector, the Ministry of Finance anticipates that the Large Scale Manufacturing (LSM) sector will maintain its positive growth trajectory in FY2025, driven by improved external demand, a stable exchange rate, declining inflation, and a more accommodating monetary policy.

  • Pakistan’s yearly inflation rate falls to 11.1 per cent in July 2024

    Pakistan’s yearly inflation rate falls to 11.1 per cent in July 2024

    In July 2024, Pakistan’s Consumer Price Index (CPI)-based inflation decreased to 11.1 per cent year-on-year, down from 12.6 per cent in June 2024 and a substantial 28.3 per cent in July 2023, according to data from the Pakistan Bureau of Statistics (PBS).

    On a month-on-month basis, the CPI inflation rose by 2.1 per cent in July 2024, a significant increase from the 0.5 per cent recorded in June 2024 but a slower rise compared to the 3.5 per cent increase in July 2023.

    The data further reveals that urban CPI inflation climbed to 13.2 per cent year-on-year in July 2024, up from 14.9 per cent in June 2024 and down from 26.3 per cent in July 2023. Month-on-month, urban CPI inflation increased by 2.0 per cent, up from 0.6 per cent in the previous month but lower than the 3.6 per cent recorded in July 2023.

    For rural areas, CPI inflation rose by 8.1 per cent year-on-year in July 2024, compared to 9.3 per cent in June 2024 and 31.3 per cent in July 2023. On a month-on-month basis, rural CPI inflation increased by 2.2 per cent, a jump from 0.3 per cent in June 2024 but slightly lower than the 3.3 per cent rise in July 2023.

    The Sensitive Price Indicator (SPI) inflation saw a year-on-year increase of 15.7 per cent in July 2024, down from 16.6 per cent in June 2024 and 29.3 per cent in July 2023. Month-on-month, SPI inflation rose by 2.0 per cent, up from 1.3 per cent in June 2024 and slightly lower than the 2.8 per cent increase in July 2023.

    The Wholesale Price Index (WPI) inflation was recorded at 10.4 per cent year-on-year in July 2024, compared to 10.6 per cent in the previous month and 23.1 per cent in July 2023. On a month-on-month basis, WPI inflation rose by 2.3 per cent, up from 0.4 per cent in June 2024 and similar to the 2.5 per cent rise in July 2023.

  • Weekly inflation rises as prices of essential food items increase

    Weekly inflation rises as prices of essential food items increase

    The Weekly Sensitive Price Indicator (SPI) for the Combined Group witnessed a 0.45 per cent increase week over week (WoW) during the week ending June 6, 2024.

    This surge marks a significant 21.69 per cent rise YoY compared to the corresponding period last year, as per data unveiled by the Pakistan Bureau of Statistics (PBS).

    The Combined Index stood at 309.91, showcasing a slight uptick from 308.52 the previous week, and a notable increase from 254.67 recorded a year ago.

    Among the 51 items monitored, the week saw prices of 19 items (37.26 per cent) soar, 14 items (27.45 per cent) witness a decline, while prices of 18 items (35.29 per cent) remained stable. Notable increases were observed in the prices of Onions (33.21 per cent), Tomatoes (15.34 per cent), Bananas (4.93 per cent), Pulse Gram (3.69 per cent), and Potatoes (2.62 per cent).

    Conversely, significant decreases were noted in the prices of Bread (3.02 per cent), Garlic (2.00 per cent), Wheat (-1.99 per cent), Petrol (1.74 per cent), and Pulse Masoor (1.43 per cent).

    The weekly SPI percentage change across income groups revealed a universal uptick, ranging between 0.33 per cent and 0.81 per cent. The lowest income group experienced the steepest weekly rise of 0.81 per cent, contrasting with a 0.33 per cent rise in the highest income group.

    On an annual basis, analysis of SPI changes across income segments indicated a consistent increase, ranging from 15.26 per cent to 25.04 per cent. Yearly SPI for the Lowest Income Group surged by 15.26 per cent, while the highest income group recorded a 19.45 per cent increase.

    In terms of specific commodities, the average price of Sona urea stood at Rs4,746 per 50 kg bag, marking a marginal 1.04 per cent decline from the previous week, yet reflecting a substantial 56.01 per cent increase compared to last year’s prices.

    Meanwhile, the average Cement price reached Rs1,255 per 50 kg bag, showing a 1.40 per cent increase from the prior week and a noteworthy 9.82 per cent surge compared to last year’s prices.

  • Govt sets ‘targets’ to reduce cost of living and boost employment

    Govt sets ‘targets’ to reduce cost of living and boost employment

    Dr Musadik Masood Malik, the Minister for Petroleum Division, affirmed on Saturday that the government is focusing on controlling inflation and creating employment opportunities as its primary objectives.

    During a press conference, Dr Malik stated that, under the directives of the Prime Minister, efforts are being made to provide maximum relief to the populace, resulting in a gradual decrease in inflation across the country.

    He mentioned that the Prime Minister has set specific targets for all ministers to alleviate the public’s burden by controlling inflation and enhancing job creation.

    Dr Malik highlighted several external factors, such as floods, natural disasters, and conflicts in Ukraine and the Middle East, which have disrupted the commodity cycle.

    Despite these challenges, the government’s measures have led to a significant reduction in the Consumer Price Index (CPI) from 37 per cent to 17 per cent. Similarly, food inflation has dropped from 40 per cent to 11.5 per cent, indicating a move towards economic stability.

    He also noted that the prices of petroleum products have been reduced, providing around Rs25-26 per litre relief on petrol within a month. Dr Malik expressed optimism that inflation will continue to decline in the coming days.

    The minister reported a 50 per cent increase in tractor purchases and a 17 per cent rise in urea production over the past year, reflecting positive economic trends.

    He assured that the forthcoming budget would be balanced and geared towards providing relief, with a projected 30 per cent increase in tax collection. Additionally, the country has seen a rise in exports and a decline in imports.

    Dr Malik concluded by stating that the budget would include more incentives for small businesses and the IT sector, aiming to foster growth and stability in these critical areas.

  • Pakistan’s headline inflation expected to drop below 14%

    Pakistan’s headline inflation expected to drop below 14%

    Inflation in Pakistan is projected to decelerate significantly in May 2024, with the year-on-year (YoY) rate expected to drop to approximately 13.9 per cent. This sharp slowdown is attributed to a notable decline in monthly prices, aided by a favorable base effect.

    Monthly inflation is forecasted to decrease by 1.4 per cent, marking the second consecutive month of decline. This figure is significantly lower than the average monthly increase of 1.35 per cent observed over the past 12 months.

    As a result, the average yearly inflation for the first 11 months of the fiscal year 2024 (11MFY24) is anticipated to be 25.1 per cent YoY, compared to 29 per cent YoY in the same period of the previous fiscal year (FY23).

    The primary driver behind the decline in monthly inflation is a substantial 440 basis points (bps) drop in the Food Index. This reduction is mainly due to lower prices of essential food items such as onions, tomatoes, chicken, and wheat. Additionally, the Transport Index is expected to decrease due to falling fuel prices.

    Looking ahead, if consumer prices increase by an average of 0.5 per cent per month, the annual inflation rate is projected to decline to about 7.4 per cent by the end of December 2024. With a 1 per cent monthly increase, the annual inflation rate would fall to approximately 11.7 per cent.

    If the monthly increase matches the last 12-month average of 1.35 per cent, the annual inflation rate will stand at 14.8 per cent by December 2024.

    The following chart outlines the projected yearly inflation trajectory based on monthly inflation rates of 0.5 per cent, 1 per cent, and the last 12-month average of 1.35 per cent.

  • Weekly inflation eases as tomato and onion prices drop

    Weekly inflation eases as tomato and onion prices drop

    According to data released by the Pakistan Bureau of Statistics (PBS), the SPI for the week ending on May 16, 2024, showed a decline of -1.06 per cent compared to the previous week. However, in a year-on-year comparison, the SPI surged by 21.22 per cent compared to the same period last year.

    The Combined Index, a key metric monitored by economists and consumers alike, stood at 309.25, indicating a decrease from 312.56 recorded a week earlier. This contrasts with the index of 255.12 registered during the corresponding period last year.

    Among the 51 items tracked, prices exhibited mixed trends, with 39.22 per cent of items experiencing an increase, 31.37 per cent witnessing a decrease, and 29.41 per cent remaining stable.

    Notable decreases were observed in the prices of tomatoes (31.18 per cent), onions (21.84 per cent), garlic (7.76 per cent), wheat (5.48 per cent), and petrol (5.32 per cent). Conversely, significant increases were noted in the prices of cooked daal (1.96 per cent), shirting (1.74 per cent), potatoes (1.46 per cent), beef (1.11 per cent), and mutton (1.04 per cent).

    Analysis of the weekly SPI percentage change across income groups revealed a uniform decrease, ranging between -1.02 per cent and -1.17 per cent. The lowest income group experienced the most significant weekly fall at 1.17 per cent, while the highest income group recorded a decline of 1.06 per cent.

    On an annual basis, SPI trends across income segments indicated increases ranging between 14.54 per cent and 24.58 per cent. The lowest income group saw a 14.54 per cent increase in the yearly SPI, while the highest income group experienced a 19.07 per cent rise.

  • Weekly inflation falls by 1%, but year-on-year rates remain high

    Weekly inflation falls by 1%, but year-on-year rates remain high

    The weekly inflation measured by the Sensitive Price Indicator (SPI) recorded a decrease of 1 per cent for the combined consumption groups during the week ended on May 02, according to data released by the Pakistan Bureau of Statistics (PBS).

    This marks a significant shift as inflation pressures ease for the first time in weeks. The SPI for the current week stands at 316.95 points, down from the previous week’s 320.14 points.

    However, compared to the corresponding week of the previous year, the SPI is up by 24.37 per cent, reflecting the ongoing inflationary trend across various sectors.

    The SPI, calculated with a base year of 2015-16, encompasses 17 urban centers and 51 essential items across all expenditure groups. The index serves as a critical barometer of inflationary trends in Pakistan.

    For the lowest consumption group, earning up to Rs17,732, the SPI decreased by 1.09 per cent, settling at 306.26 points, down from last week’s 309.64 points.

    Similarly, the SPI for consumption groups in the ranges Rs17,732-22,888, Rs22,889-29,517, Rs29,518-44,175, and above Rs44,175 saw decreases of 1.12 per cent, 1.02 per cent, 1.04 per cent, and 0.95 per cent, respectively.

    This broad-based decline indicates a general easing of inflationary pressures across different income groups.

    Price variations across essential items

    Out of the 51 items evaluated by the SPI, the prices of 18 items decreased, 15 increased, and 18 remained stable during the week.

    Items showing decreased prices

    Key items that recorded a notable decrease in their average prices on a week-on-week basis include:

    – Tomatoes: 22.05 per cent decrease

    – Chicken: 8.03 per cent decrease

    – Onions: 7.71 per cent decrease

    – Wheat flour: 6.88 per cent decrease

    – Bananas: 5.25 per cent decrease

    – Diesel: 2.89 per cent decrease

    Items with increased prices

    In contrast, some items saw a rise in their prices. These include:

    – Potatoes: 6.06 per cent increase

    – Salt powder: 0.91 per cent increase

    – Garlic: 0.85 per cent increase

    – Powdered milk: 0.70 per cent increase

    Year-on-year trends

    While the week-on-week numbers showed a decline, the year-on-year comparison paints a more complex picture.

    Certain commodities experienced significant increases over the past year. Notable among them are:

    – Gas charges for Q1: 570 per cent increase

    – Onions: 145.15 per cent increase

    – Tomatoes: 79.43 per cent increase

    – Garlic: 72.46 per cent increase

    – Chilies powder: 71.96 per cent increase

    However, some items witnessed a decrease in average prices over the year, including:

    – Bananas: 37.76 per cent decrease

    – Wheat flour: 23.15 per cent decrease

    – Cooking oil (5 litre): 20.45 per cent decrease

    These figures suggest a dynamic landscape of price fluctuations, with some areas showing improvement while others continue to face inflationary pressures.

    The decrease in SPI for the current week offers a brief respite from the upward inflation trend, but with significant year-on-year increases in many commodities, vigilance remains crucial.

  • Pakistan’s inflation eases slightly to 28.3% in January 2024

    Pakistan’s inflation eases slightly to 28.3% in January 2024

    The Pakistan Bureau of Statistics (PBS) reported that the country’s headline inflation for January stood at 28.3 per cent on a year-on-year basis, marking a slight decrease from the December figure of 29.7 per cent. The month-on-month reading recorded a 1.8 per cent increase.

    This latest data brings the average inflation for the period of July to January to 28.73 per cent, up from 25.40 per cent in the corresponding period of the previous year. Despite this surge, the inflation rate aligns with the government’s expectations.

    The Ministry of Finance, in its ‘Monthly Economic Update and Outlook’ report released on Wednesday, projected a CPI-based inflation rate of 27.5-28.5 per cent for January 2024. The report attributed the inflationary pressure to elevated prices of perishables and vegetables, along with increased utility costs for electricity and gas.

    A contributing factor to the rising prices has been a surge in onion export orders following the Indian ban, straining local supply and causing domestic prices to escalate.

    Severe weather disruptions led to supply shortages of tomatoes, resulting in price hikes, while reduced chicken supply, especially from controlled sheds facing higher input costs, contributed to increased chicken prices.

    JS Global, in a report from last week, anticipated that inflation would remain elevated, particularly in the food segment. The report predicted a 1.8 per cent month-on-month uptick in food prices, resulting in an overall January 2024 YoY CPI estimate of 27.9 per cent.

    The brokerage house noted that the CPI inflation in the coming months is expected to remain on the lower side amid the decline in local fuel prices and the high base effect of last year.

    Breaking down the inflation figures, urban areas recorded a year-on-year CPI inflation of 30.2 per cent in January 2024, slightly lower than the previous month’s 30.9 per cent and higher than January 2023’s 24.4 per cent. On a month-on-month basis, urban inflation increased by 1.8 per cent in January 2024.

    In rural areas, year-on-year CPI inflation for January 2024 was 25.7 per cent, down from the previous month’s 27.9 per cent but higher than January 2023’s 32.3 per cent. On a month-on-month basis, rural inflation increased by 1.9 per cent in January 2024.

    The PBS data indicates a nuanced inflationary landscape in Pakistan, with both urban and rural areas experiencing fluctuations in prices across various commodities. The government’s focus on addressing these challenges remains critical as it navigates the economic impact of inflation on citizens and businesses.