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Tuesday March 19, 2024

Govt tweaks October inflation to 6.8 percent

By Our Correspondent
November 15, 2018

Karachi: Government on Wednesday marginally revised annual consumer price inflation down to 6.8 percent for October from the earlier seven percent after recalculating the impact of gas price hike.

“Monthly review of price indices for the month of October, 2018 has been rationalised by adjusting seven slabs of gas prices introduced by OGRA

(Oil and Gas Regulatory Authority) into five slabs of CPI (consumer price index) methodology adopted by PBS,” the Pakistan Bureau of Statistics (PBS) said in a statement for the recalibrated figures.

The government last month raised gas prices in the range of 10 to 143 percent, while introducing seven slabs of prices for different categories of consumers. Previously, gas price hike was calculated at 105 percent.

Analysts said since the gas has 1.65 percent weight in the consumer inflation basket, the number came at seven percent.

“The PBS measured the average gas prices based on the seven slabs instead of previous five, which it used to base the calculation on,” Adnan Sheikh, assistant vice president at Pakistan Kuwait Investment Company said.

“Therefore, the gas price hike was taken as 105 percent earlier, which translated into ticking up of inflation number.”

PBS, in its revised table, put the gas price increase at 85.3 percent year-on-year for October.

Analysts found fault in miscalculation on the part of the PBS.

“They used wrong growth rate in gas prices previously,” Zeeshan Afzal, executive director at Insight Securities said.

PBS said CPI increased 2.3 percent on month-on-month basis in October as compared to a decrease of 0.1 percent in the previous month and increase of 0.7 percent in the corresponding month a year earlier.

Previously, the CPI inflation was recorded at 2.6 percent on month-on-month basis in October.

Annual consumer price inflation is still four-year high as it was recorded at 5.8 percent in October 2014 after having eased from 7.7 percent in the previous month.

The inflation tally is well above the target of six percent and continues to rise “primarily due to lagged pass-through of the PKR depreciation and the upward trajectory of global oil prices,” the central bank said in a report.

Besides, core inflation measured by non-food non-energy CPI increased 8.2 percent year-on-year in October as compared to an increase of eight percent in the previous month and 5.3 percent in October 2017.

On month-on-month basis, core inflation rose 1.1 percent in October as compared to an increase of 0.4 percent in the previous month, and an increase of 0.9 percent in corresponding month of last year.