Consumer inflation clocks in at 6.5 percent in November

KARACHI: Annual consumer price inflation clocked in at 6.5 percent for November, which remained below the market consensus and the last month reading, as perishable food prices tumbled during the month, official data showed on Tuesday.

Pakistan Bureau of Statistics (PBS) recorded annual consumer price index (CPI) inflation for October at 6.8 percent.

Analysts were generally expecting increase in inflationary pressure due to bouts of rupee devaluation that might lead to cost-push inflation.

"It was below expectation because of slower inflation across all heads," Zeeshan Afzal, executive director of Research at Insight Securities said. "It looks like overall inflation in early next year may not be as high as was feared by many."

In November, perishable food prices fell 21.22 percent over the corresponding month a year earlier; although prices of non-perishable food items rose 5.73 percent year-on-year during the month.

Food inflation, which accounts for around 35 percent of the inflation basket, increased 1.02 percent in November over the corresponding month a year earlier.

In November, prices of tomatoes decreased 61.3 percent year-on-year, followed by onion (58.10pc), potatoes (20.26pc), pulse mash (12.15pc), gram whole (10.56pc) and eggs (10.35pc). Foods, which registered fall in prices in November over October, included tomatoes (43.72pc), fresh vegetables (11.50pc), fresh fruits (7.56pc) and onion (7.51pc).

Prices of chicken increased 44.46 percent in November over the same month a year ago, followed by spices (13.95pc), meat (12.69pc), cigarettes (12.26pc), dry fruits (10.45pc), tea (9.35pc) and rice (9.28pc). Prices of chicken, eggs, potatoes, fish, pulse mash, pulse moong and dry fruits also rose 14.78 percent, 10.20 percent, 6.99 percent, 4.03 percent, 3.60 percent, two percent and 1.73 percent, respectively in November over October.

Consumer price inflation is above the annual target of six percent with the central bank projecting it in the range of 6.5 to 7.5 percent for the current fiscal year of 2018/19 as lagged impact of rupee devaluation started to translate into rise in prices.

CPI inflation in November increased by 0.1 percent as compared to an increase of 2.3 percent in the previous month and increase of 0.4 percent in November last year.

Core inflation measured by non-food non-energy CPI increased 8.3 percent on year-on-year basis in November as compared to an increase of 8.2 percent in the previous month and 5.5 percent in November last year.

Core inflation increased 0.4 percent on month-on-month basis in November as compared to an increase of 1.1 percent in the previous month, and an increase of 0.3 percent in the corresponding month of last year.

Rise in inflation has been a key reason behind the central bank’s monetary tightening policies. The central bank has pushed up the policy rates by cumulative 425 basis points to 10 percent since January. The current rate is four-year high.

PBS data further showed that wholesale price index inflation increased 13.5 percent year-on-year in November compared to an increase of 13.1 percent a month earlier and an increase of 2.9 percent in November 2017. Wholesale price index inflation on month-on-month basis rose 0.7 percent in November compared to an increase of 4.2 percent a month earlier and an increase of 0.4 percent in corresponding month of last year.