November inflation drops to 23.8% in Pakistan

ISLAMABAD: In line with the Ministry of Finance's monthly outlook, the inflation based on the consumer price index eased to 23.8% in November compared to 26.6% recorded in October, the latest bulletin from the Pakistan Bureau of Statistics (PBS) showed on Thursday.

According to the data released today, the inflation rate also slowed to 21.6% and 27.2% in urban and rural areas; however, the ongoing double-digit inflation in the country affected people's purchasing power adversely.

In November, the inflation moderated to 0.8% on a month-on-month basis, compared to an increase of 4% in October and 3% in November 2021.

Speaking to Geo.tv, Economist Sana Tawfiq said a lower jump in food prices is a significant reason behind this month-on-month drop.

"Reasons for month-on-month moderation was a lower jump in food prices with the food index up meagre 0.1%, and transportation was down 0.1% too.

"On the contrary, housing, clothing, and household equipment indices were up monthly, showing a jump in winter-related items such as woollen garments and dry fruits," she added.

The Ministry of Finance, in its monthly outlook report, had mentioned that inflationary pressure would ease marginally in November, citing smooth domestic supplies, unchanged fuel prices and a steady exchange rate.

PBS data showed that food prices surged nearly 28.92% in November compared to the same month a year ago. However, the prices of perishable food items decreased by 0.27%.

According to PBS, the pace of food inflation, on a year-on-year basis, reached 29.7% in cities and dropped to 33.5% in villages and towns last month.

The national data collection agency reported that the non-food inflation slipped to 16.4% in urban areas and 21.4% in rural areas compared to the same month last year.

Core inflation eased to 14.6% in urban areas while increasing to 18.5% in rural areas. Tawfiq voiced her concerns over high core inflation as the economist acknowledges higher core inflation is 'alarming'.

Tawfiq predicted that we expect headline inflation to come down further, supported by a high base.

Price of essential food items

The prices of onions — an essential vegetable used in all households — were higher by over 34% last month compared to September, followed by a 14.79% increase in the rates of tea, and nearly 14.5% in various the price of potatoes and dry fruits, according to the PBS.

However, vegetable prices decreased by 10-30%, chicken by 5.08%, and the rate of various pulses by over 5%, PBS data shows.