Friday May 24, 2024

Double-digit February inflation eases slightly

By Israr Khan
March 02, 2022

ISLAMABAD: Inflation loitered in the double digits for the fourth month in a row, though eased slightly in February, led largely by food and energy components, official data showed on Tuesday.

The consumer price index (CPI) rose 12.2 percent on year, Pakistan Bureau of Statistic (PBS) data showed, easing slightly from the previous month's two-year high of 13 percent.

Analysts said the February inflation numbers are largely in line with a market forecast and slight above an official target range of 9-11 percent, maintaining pressure for further tightening of monetary policy.

Eight-month (July-February 2021-22) average inflation recorded at 10.52 percent compared to 8.25 percent in the same period last year.

Major upward pressure in prices came from two components with the highest weightage in the CPI basket – food and beverages with one-third (or 34.58 percent) share and utility charges (housing, water, electricity, and fuel) with around one-fourth (or 23.63 percent share). Clothing and footwear and transportation charges also increased sharply.

Government attributes high inflation to increased commodity prices, including food and crude oil in the international market, with supply-chain disruptions also creating shortages. Currently, Pakistan is a net importer of wheat, pulses, sugar, edible oil, and some other food items.

According to PBS, urban inflation increased 11.5 percent year-on-year in February as compared to 13 percent in the previous month, and 8.5 percent in February 2021. Similarly, rural CPI increased 13.3 percent YoY, compared to 12.9 percent in the previous month, and 8.8 percent in February 2021.

Urban core-CPI (excluding food and energy components), increased 7.8 percent YoY in February 2022 against an increase of 8.2 percent in the previous month and 6.4 percent a year ago. Likewise, rural core-CPI increased 9.4 percent YoY in February 2022 compared to 9.0 percent in the previous month, and 7.7 percent in February 2021.

PBS data showed wholesale price index (WPI) shot up 23.6 percent rise in February compared to 24 percent a month ago, and only 9.5 percent in February 2021.

Similarly, sensitive price indicator (SPI) also increased 18.7 percent in February 2022 compared to 20.9 percent last month and 11.9 percent in the same month of the last year.

During the month, prices of food and beverages increased 14.73 percent from 12.82 percent in the previous month. In a month, tomato prices went up 191.7 percent, chicken 11.6 percent, vegetables 10.7 percent, fruits 7.3 percent, mustard oil 6 percent, fish 3.3 percent, gram pulse 2.9 percent, vegetable ghee 2.7 percent, cooking oil 2.27 percent, besan 2.0 percent, rice 1.8 percent, gram whole 1.6 percent, meat 1.25 percent and masoor pulse 1.2 percent. However, egg prices fell 11.8 percent, potatoes 9.7 percent, onions 8.8 percent, condiments and spices 6.47 percent, and sugar price went down 3.96 percent.

On YoY basis, price of tomatoes went up 310 percent, mustard oil 50 percent, cooking oil 41 percent, vegetable ghee 39 percent, masoor pulse 38 percent, vegetables 33 percent, fruits 26 percent, whole gram 24 percent, meat 23.6 percent, gram pulse 14 percent, beans 13 percent, besan 12 percent, rice 12 percent, and milk 11 percent. Decline was registered in prices of moong down 26 percent, condiments and spices 14 percent, sugar 5.4 percent, onions 5.35 percent, and chicken 4.6 percent.

Utility charges (housing, water, electricity, and fuel) increased by 8.99 percent in February 2022. In February, on a month-on-month basis, motor fuel prices were up 4.24 percent, washing soap/detergents/matchbox 2.2 percent, hosiery 2.03 percent, motor vehicle accessories 1.6 percent, clinic fee 1.6 percent, solid fuel 1.6 percent, and cleaning and laundering 1.17 percent.

Similarly, YoY price of liquefied hydrocarbons went up 55 percent, motor fuel 40 percent, cleaning and laundering 23 percent, washing soap/detergents/matchbox 17 percent, motor vehicle accessories 16 percent, solid fuel 13 percent, plastic products 11 percent and stationery increased 10.5 percent over the same month of last year.

The other components of the CPI also showed an increase in their prices. The transport sector although having a low share in the CPI basket, showed the highest increase in charges at 25.04 percent, hoteling 14.4 percent, furnishing and household equipment maintenance 13.44 percent, health charges 10.1 percent, clothing and footwear 9.67 percent, recreation and culture 8.16 percent. Similarly, education charges increased 3.42 percent and communication charges 2.54 percent over the corresponding month of last year.