CPI rises 2.73pc in November on higher food prices

KARACHI: Consumer price inflation (CPI) rose to 2.73 percent year-on-year in November, marking the highest rate since July this year, as rising food prices and weak currency ended a slowdown.
The year-on CPI clocked in at 1.6 percent in October 2015 and four percent in November 2014, showed the data released on Monday by the Pakistan Bureau of Statistics (PBS).
An analyst said inflation rate ticked up in November but was still on the low end of the range deemed comfortable by the central bank. Food prices were the main factor behind higher rates during the last month, the analyst added.
Last month, the central bank also held its benchmark interest rate steady at 6.0 percent on expectation of higher inflation in November. The bank, however, sees that average inflation would remain below the FY16 annual target of six percent.
The PBS data showed that prices of food and non-alcoholic beverages, which have the highest weight in the CPI basket, increased 1.26 percent in November this year over the preceding month and 1.33 percent over November last year.
Analysts said the CPI number is largely in line with their expectations, although food inflation has marginally gone up, which was also expected given meat and vegetable prices had gone up.
“There was an increase in prices of perishable commodities January onwards,” said analyst Muhammad Imran at NBP Fullerton Asset Management Limited.
Dr Ashfaquq Hasan, ex-economic advisor of the finance ministry said there was an increase in last year's November number and this time the base effect has worn on.
The PBS registered the highest surge in the prices of chicken (21.13 percent) in November 2015 over the previous month, followed by tomatoes (18.12pc), onions (14.61pc), potatoes (12.82pc), eggs (10.68pc), Besan (3.69pc), vegetables (3.26pc), tea (3.14pc), pulse mash (2.90pc), pulse gram (2.51pc), fish (2.39pc), betel leaves and nuts (1.88pc), wheat flour (1.49pc), wheat (1.46pc), gram whole (1.39pc) and dry fruits (1.06pc).
Dr Khan said the inflation is likely to go further up in the near future, “as the government new tax measures to generate Rs40 billion of revenue will stoke price inflation.”
CPI was still low at 1.86 percent in July-Nov this year as compared to 6.45 percent in the same period a year ago.
The food items, which recorded the highest increase in their prices in November this year over the same month a year ago, included tomatoes (95.45pc), onions (83.90pc) and pulse gram (56.35pc).
Prices of potatoes, rice, cooking oil, eggs and vegetable ghee were shown downward trend in November 2015 over the same month last year.
Prices of housing, water, electricity, gas and fuels got dearer 4.97 percent in November 2015 over the same month last year, but they showed inching up 0.02 percent over the preceding month.
The PBS data showed that prices of clothing and footwear surged 4.57 percent in November 2015 over November 2014.
Health facilities were also shown upward price trend year on year as their prices rose 2.98 percent in November 2015 over November 2014.
Year-on-year rise in education prices was also noticeable as there was 8.75 percent change recorded in education prices in November 2015 over the same month last year.
The whole price index was recorded at minus 1.7 percent in November 2015 against a minus 2.7 percent in the previous month (October) and an increase of 0.01 percent in November 2014.
The sensitive price indicator, which gauges weekly-based inflation in kitchen items, decreased one-and-a-half percent in August year-on-year, as compared to decrease of half a percent a month ago and 5.17 percent rise in August 2014.
Historically, inflation averaged at 7.99 percent from 1957 until 2015. It was recorded at all time high of 37.81 percent in December 1973 and a record low of minus 10.32 percent in February of 1959.