ISLAMABAD: Fueled by runaway food prices, Pakistan’s headline national inflation has accelerated faster than expected to 9.04 percent in September 2020, against August reading of 8.2 percent.
The most worrisome fact of the latest CPI bulletin released here on Friday by the Pakistan Bureau of Statistics (PBS) is that rural inflation increased much faster than urban inflation. Urban inflation was recorded at 7.7 percent while rural inflation stood at 11.1pc during September 2020.
Last year in September 2019, the CPI was recorded at 11.4 percent, the PakistanBureau of Statistics (PBS) on Friday reported. In FY20 (July-June 2019/20), the average inflation was recorded at 10.74pc, with peak reading in January of 14.56 percent year-on-year.
The latest CPI bulletin says that on month-on-month basis, inflation increased by 1.5pc in September 2020 as compared to an increase of 0.6pc in the previous month and an increase of 0.8pc in September 2019.
CPI is a main gauge of price changes at the retail level of all goods and services consumed by private households and roughly reflect changes in cost of living of entire Pakistan. According to the CPI basket, on average each Pakistani spends 34.58 per cent of his income on food and beverages, 23.63 per cent on house rent, water, gas, electricity and fuel, 8.6pc on clothing & footwear; 6.92pc on hoteling, 5.91pc on transportation, 4.1 pc on furnishing & household equipment maintenance, 3.79pc on education, 2.7 pc on health, 2.21pc on communication, but the least it spends 1.59pc of its income spend on recreation & culture.
Food inflation in September 2020 stood at 14.74 pc against 12.89 pc in previous month. It was followed by clothing & footwear prices with an increase of 9.13 pc, health charges 8.25pc, hoteling 8.25pc, furnishing & household equipment maintenance charges up by 7.89pc, Charges of utilities (housing, water, electricity, gas and fuel) increased by 6.10pc, Alcoholic beverages and Tobacco 5.86pc, recreation & culture 3.93pc, education 0.98pc and communication charges up by 0.29pc over corresponding month of last year. However, transportation charges declined by 1.53 pc over corresponding month of last year.
Price hike in almost all categories was more than previous month. However, the food was the showed highest increase that strongly jacked up the overall inflation.
The Wholesale Price Index (WPI) on the other hand has increased by 1.05pc over August 2020 and 4.26 pc increase over corresponding month of last year. Keeping in view the low reading of the WPI, economic experts believe that CPI in coming months may reduce.
Since under the new methodology, the inflation is being gauged in urban and rural areas separately and then SBP reports the national inflation.
In September 2020, urban CPI inflation increased by 7.7pc as compared to an increase of 7.1pc in the previous month and 11.6pc in September 2019. On month-on-month basis, it increased by 1.3pc in September 2020 as compared to an increase of 0.8pc in the previous month and an increase of 0.7pc in September 2019.
Rural CPI inflation also increased by 11.1 pc on year-on-year basis in September 2020 as compared to an increase of 9.9pc in the previous month and 11.1pc in September 2019. On month-on-month basis, it increased by 2.0pc in September 2020 as compared to an increase of 0.4pc in the previous month and an increase of 0.8pc in September 2019.
During the month under review, core inflation (excluding food and energy costs) of urban CPI increased by 5.5 percent year on year basis as compared to increase of 5.6 percent in the previous month and 8.4 percent in September 2019. On month on month basis, it increased by 0.3pc in September 2020 as compared to increase of 0.7 percent in previous month and an increase of 0.4pc in corresponding month of last year.
Core inflation of rural CPI increased by 7.8pc on (YoY) basis in September 2020 as compared to an increase of 7.6pc in the previous month and 8.8pc in September 2019. Whereas, on month on month basis, it increased by 0.4 percent in September 2020 as compared to an increase of 0.8 percent in previous month, and an increase of 0.3 percent in corresponding month of last year.
SPI that gauges essential kitchen items prices on weekly basis, increased by 12pc year on year in September 2020 as compared to an increase of 11.7pc a month earlier and an increase of 14.7 percent in August 2019. On MoM basis, it increased by 2.1pc in September 2020 as compared to an increase of 0.9 percent a month earlier and an increase of 1.9 percent in July 2019.
Over the previous month, tomatoes price increased by 44 percent, Vegetables 30.3 percent, Chicken 18.3 percent, Onions 14.5 percent, Potatoes 6.2 percent, Eggs 5.2 percent, Pulse Gram 4.5 percent, Pulse Moong 3.5 percent, spices 3 percent, Pulse Mash 2.76 percent, Pulse Masoor 1.59 percent and milk fresh 1.16 percent. Construction input items charges increased by 2.36 percent, transport services 1.87 percent, medical tests 1.55 percent and plastic products price increased by 0.78 percent over previous month.
However, Fresh fruits price down by 6.19 percent, sugar 1.82 percent, gram whole 0.48 percent, Liquefied Hydrocarbons 1.51 percent and electricity charges down by 0.62 percent over previous month.
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