CPI inflation clocks in at 3.7pc; food prices show uptrend

KARACHI: Pakistan’s annual consumer price inflation clocked in at 3.7 percent for January – similar to the last month’s reading – as food prices increased year on year, official data showed on Wednesday.

Food inflation, which accounted for more than 35 percent in the CPI basket, rose 1.96 percent in January over the same month a year ago, but it fell 1.17 percent over December 2016, according to the Pakistan Bureau of Statistics (PBS). 

Prices of perishable food items increased 2.49 percent in January 2017 over the same month of 2016, but they decreased 8.51 percent over December 2016.

The PBS said CPI inflation increased 0.2 percent in January 2017 as compared to a decrease of 0.7 percent in the previous month and an increase of 0.2 percent in January 2016.        

The PBS estimated the average inflation at 3.85 percent for the July-January period of 2016/17 – more than 2.26 percent for the same period of 2015/16, but less than 5.77 percent in the July-January period of 2014/15.  

The State Bank of Pakistan (SBP) estimated the average CPI inflation at 3.9 percent during the first half of the current fiscal year, “lower than the earlier projections due to smooth supply of perishable items, stable exchange rate, and government’s absorption of the impact of higher international oil prices.” 

The central bank forecast the annual inflation at below the target of six percent for 2016/17 and cited it as a reason to keep the interest rate unchanged at 5.75 percent for the January-February monetary policy announcement. 

The PBS data showed that prices of fresh fruits increased 3.81 percent in January over the preceding month, followed by sugar (3.1 percent), cigarettes (1.26 percent), and rice (1.03 percent). Prices of tomatoes, however, decreased 39.98 percent month-on-month, followed by potatoes (29.65 percent), fresh vegetables (10.46 percent), pulse mash (3.78 percent), pulse moong (3.69 percent), eggs (2.68 percent), pulse masoor (2.53 percent), besan (2.38 percent), chicken (2.38 percent) and pulse gram (2.07 percent).

Prices gram whole rose 40.21pc in January over the same month a year earlier, followed by pulse gram (34.05 percent), besan (28.65 percent), eggs (22.21 percent), potatoes (18.98 percent), fresh vegetables (15.48 percent), cigarettes (12.18 percent), sugar (8.51 percent), fresh fruits (8.01 percent), and betel leaves and nuts (6.08 percent). Prices of onion, however, fell 39.07 percent year-on-year in January, followed by tomatoes (20.62 percent), chicken (16.97 percent), pulse moong (13.38 percent), pulse mash (10.86 percent) and tea (6.23 percent).

Cost of housing, water, electricity, gas and fuels jumped 4.89 percent in January over the same month a year ago. It, however, inched up 1.42 percent in the month under review over the previous month. 

Likewise, education cost remained flat month-on-month, but it climbed 11.49 percent year-on-year. 

Core inflation, measured by non-food non-energy CPI, increased 5.4 percent year-on-year in January, as compared to 5.2 percent in the previous month and 4.3 percent in January 2016. It increased 1.1 percent month-on-month in January as compared to 0.1 percent in the previous month and 0.9 percent in January 2016. 

Wholesale price index (WPI) inflation rose 4.2 percent year-on-year in January compared with 3.1 percent a month earlier and 0.1 percent in January 2016.

WPI inflation inched up 0.5 percent in January as compared to a decrease of 0.1 percent a month earlier and a decrease of 0.5 percent in the corresponding month of the last year.