Inflation edges up to 3.16 percent in May

ISLAMABAD: Pakistan’s consumer inflation edged up to 3.16 percent in May owing to higher food and education prices, the Pakistan Bureau of Statistics (PBS) data showed on Monday.
Headline inflation measured by the consumer price index (CPI) stood at 2.11 percent in April.
The International Monetary Fund representative in Pakistan Tokhir Mirzoev said the CPI latest figure means that lower oil prices are still working their way through the economy.
“We expect inflation to rise gradually in the coming fiscal year as commodity price effects dissipate,” Mirzoev said. “Inflation should however remain well-anchored by continued prudent monetary and fiscal policies.”
The PBS said average CPI inflation in the first 11 months of the current fiscal year (2014/15) was 4.65 percent as compared to 8.66 percent in the same period last year.
Food and beverages inflation, carrying more than one-thirds weightage in CPI basket, increased to 2.22 percent in May over the record low of -1.05 percent in April, the PBS data revealed.
In the month under review, utilities charges (housing, water, electricity, gas and fuel) were up by 4.86 percent. Health and education became dearer by 3.35 percent and 10.83 percent, respectively.
Prices of alcoholic beverages and tobacco rose 20.26 percent, clothing and footwear 6.13 percent, and furnishings and household equipment maintenance 4.37 percent.
Charges related to recreation and culture went up 2.39 percent and restaurants and hotels 4.37 percent in May over the same month in 2014. However, transportation fares were down negative 9.34 percent.
The low inflationary trend, following a fall in global oil prices, allowed the central bank to cut interest rate in successive monetary policy announcements from November 2014 onwards. Last week the bank slashed the policy rate for the fourth straight time to a 42-year low of 7 percent from 8 percent in a bid to spur economic growth.
In Pakistan, inflation averaged 7.99 percent from 1957 until 2015. It was recorded at all times high of 37.81 percent in December 1973 and record low -10.32 percent in February of 1959.
In May, core Inflation, excluding food and energy costs, stood at 4.9 percent in May 2015 as compared to 5.4 percent in the previous month and 8.7 percent in May 2014.
The wholesale price index, on a year-on-year basis, dropped 1.8 percent in May 2015 as compared to 2.9 percent decrease a month ago and increase of 7.3 percent in May 2014.
This signals that the CPI inflation will go down in months to come.
The sensitive price indicator, which gauges weekly-based inflation in kitchen items, increased 1.2 percent in May 2015 year-on-year, as compared to 1.6 percent fall a month ago and 7.7 percent rise in May 2014.