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February 9, 2020

Food prices to be stabilised in coming months, govt tells IMF

Business

February 9, 2020

ISLAMABAD: Pakistani authorities on Saturday apprised the IMF mission of steps being taken to check runway inflation, saying food prices would be stabilised in the coming months.

Minister for National Food Security and Research Khusru Bakhtyar said the government is taking all necessary measures for management of food inflation.

“A bumper wheat crop is expected this year and there will be no issue of wheat supply in the coming months,” Bakhtyar told International Monetary Fund (IMF) staff mission during a meeting.

The mission is currently on a visit to Pakistan to review the economy’s performance in line with the conditions related to the Fund’s loan program. The successful review would pave the way for release of third tranche under the $6 billion extended fund facility.

Senior officials from the ministries of food, finance and State Bank of Pakistan were also present during the meeting.

Meanwhile, Pakistan Bureau of Statistics (PBS), citing estimates of various researchers, said January inflation was around 13 percent, whereas the actual inflation compiled by it was 14.6 percent, “more than what was estimated”.

“The inflation is higher because the prices were collected during the peak of the price surge in mid of the month,” it said in a statement. “It (PBS) followed standard operating procedures regarding time schedule for data collection.”

PBS denied an impression that inflation figure was understated, saying the institution is unbiased towards compilation and publication of price statistics.

The bureau said it collects real-time prices data based on android technology equipped with global positioning system and monitored at different levels. The prices data collection, validation and publication are well synchronised with best global standard classification of individual consumption by purpose. It compiles data without any political intervention or motivation and transparency is ensured regarding city-wise price data. “Therefore, fudging of the data is not possible,” it added.

PBS said average price of wheat flour (Rs47/kg) is weighted average price calculated from varying prices from Rs800 to Rs1,200 in different cities as per availability of flour in the market. The prices in Punjab were on average Rs40 per kg, while in Karachi it was highest at Rs60 per kg. City-wise prices of 51 essential items are given as annexure of the consumer price index on the website of PBS.

In Punjab, the wheat flour average price ranges from 800 to 942 per 20 kg. Private flour is available in the market. Average wheat flour price ranges from Rs1,000 to Rs1,200 per 20 kg in Khyber Pakhtunkhwa, Sindh and Balochistan.

On five percent increase in rent, PBS said rent prices are collected on quarterly basis and computed on the basis of weighted average approach based on the data collected from small and large housing units, which revealed that the year-on-year rent increase is 5.63 percent for the current quarter.

“This increase is aligned with historical trend of rent increase,” PBS said. “However, it is not essential that rent increases every month.”

PBS, showing historical data, said rent increased 6.17 percent year-on-year in July 2017, 5.89 percent in October 17, 4.26 percent in January 2018, 5.42 percent in April 2018, 5.89 percent in July 2018, 7.06 percent in October 2018, 6.34 percent in January 2019, 6.29 percent in April 2019, 6.46 percent in July 2019, 5.02 percent in October 2019, and 5.63 percent in January 2020.