ISLAMABAD: Inflation hit its highest in nearly five months in November as increases in food and fuel costs pushed consumer prices up to 11.5 percent year-on-year, official data showed on Tuesday.
The consumer price index (CPI) jumped 3 percent from October 2021, when it recorded 8.3 percent, the Pakistan Bureau of Statistics (PBS) data showed. The November inflation is the fastest growth since May 2021. Economists said rising food costs were the main driver, followed by vehicle fuels and electricity charges. They said the recent acceleration in inflation was transitory, driven by supply chain disruptions and surging global commodity prices. “Imported inflation (high energy and commodity prices) are also instrumental in pushing prices up in the economy,” an economist said.
Inflation is considered as ‘unseen tax’ or penalty on cash holders which is dwindling purchasing power and has now turned into a politically-sensitive subject. The five-month (July-November) inflation was recorded at 9.3 percent compared to 8.8 percent in same period of last year.
The government has targeted to keep inflation under eight percent in the current fiscal year of 2021/22.
CPI is a basket of goods monitoring retail prices of 374 items in 35 major cities. Its two major components that have highest weightage including food and beverages have share of more than one-third (or 34.58 percent) and utility charges (housing, water, electricity and fuel) with around one-fourth (or 23.63pc share) sharply become dearer during November.
While excluding the food and energy components, the core CPI increased for urban and rural areas. Urban core inflation recorded at 7.6 percent year-on-year in November 2021 and rural 8.2 percent against October 2021 reading of 6.7 (identical) for both urban and rural areas. The most worrisome aspect of the PBS data was that the Wholesale Price Index (WPI) reading came unexpectedly high at 27 percent in the month compared to 21.2 percent a month earlier and only 5 percent in November 2020. The higher reading is signaling that in coming months the CPI may go further up. Urban CPI recorded at 12 percent year-on-year in November 2021 against 9.6 percent in October 2021. Similarly, rural inflation arrived at 10.9 percent against 8.7 percent in previous month. Of the CPI basket, transportation charges increased highest among all categories with 24.43 percent, followed by furnishing and household equipment maintenance charges that went up by 14.75 percent. Hoteling charges up by 11 percent, Food and beverages 10.47 percent. Food inflation increased mostly due to hike in prices of tomatoes, edible oil, ghee, vegetables, potatoes, fruits, meat, milk and pulses.
Besides, utility charges--housing, water, electricity, gas and fuel increased by 10.38 percent, clothing and footwear 9.8 percent, health charges 8.55 percent, recreation and culture 7.5 percent. Similarly, communication charges 2.5 percent and education charges increased by 2.4 percent over the corresponding month of last year.