CPI inflation may hover around 16pc in June

ISLAMABAD: The Consumer Price Index (CPI) based inflation might go close to 15.5 percent to 16 percent year-on-year in June 2022 mainly because of increased fuel and commodities prices, The News has learnt.

The Ministry of Finance in its latest report released on Wednesday had indicated a range of inflation between 14.5 percent to 15.5 percent for June 2022.

However, the forecasting model suggests that the CPI-based inflation might be higher by some notches.

“We expect that the CPI-based inflation will be hovering around 15.7 or 15.8 percent for June 2022 as Pakistan Bureau of Statistics (PBS) will release official figures on Friday (today),” top official sources confirmed, while talking to The News.

The CPI-based inflation stood at 13.8 percent in May 2022 YoY basis. The Sensitive Price Indicator (SPI) which is calculated on the basis of 51 items on weekly basis, was at 28 percent on June 23.

The SPI data showed, on the basis of the last two weeks, the consumer prices increased to unprecedented level so it will also fuel CPI-based inflation.

Suspected figure fudging

According to officials, without alleged tinkering with the data, the CPI-based inflation should cross the 16 percent mark but the wheat flour prices are said to have been allegedly manipulated to stand at Rs980/20kg bag in Punjab. These allegations need proper and thorough investigation to dispel the impression of “manipulation”.

A proper investigation is required to ascertain that wheat flour, electricity, and house rent figures, calculated for the CPI basket, are not fudged. The suspicion arose after the SPI and CPI numbers showed wheat flour price remained flat at Rs980/20 kg across Punjab.

Interestingly, the price of a 10 kg wheat flour bag in Gujranwala is Rs700, higher than Rs682/10kg in Bannu and Hyderabad. When the price of a 20kg wheat flour bag is Rs980 in the whole of Punjab then how the price of a 10 kg wheat flour bag can be Rs700/bag. It clearly shows something is wrong with the price data.

The minimum price of a 20kg wheat flour bag is Rs980, while its maximum is over Rs16,00 per bag. This huge variation of price within the city of Peshawar warrants an investigation. In Karachi, the price of a 20kg wheat flour bag is Rs1,500 to Rs1700. There is a differential of Rs600 to Rs720 per bag in Karachi and Gujranwala.

On May 19, 2022, the price of 20 kg wheat flour bag in Punjab was hovering around Rs1,300 to Rs1,400; however, what happened in the last 8 weeks was that the price decreased by Rs400/bag all of sudden and then the price of wheat flour turned flat at Rs980/bag. The electricity prices were shown to have decreased by 21 percent in May 2022, but the consumers are complaining it has gone up.