ISLAMABAD: Annual inflation eased to 3.2 per cent in February — the lowest since October 2003 — from 3.88pc in the previous month as transport fares dropped on the back of cheaper fuel prices.

On a month-on-month basis, the inflation measured by the Consumer Price Index (CPI) fell by 0.9pc in February compared to 0.1pc increase in January, Pakistan Bureau of Statistics said on Monday.

Average inflation during the first eight months (July-Feb) of this fiscal year was 5.45pc.

The downward pressure came mainly from decline in the cost of non-perishable food items (-0.76pc) and transport (-0.21pc).

Falling oil prices may drive the CPI further down in this month as transporters also announced partial cut in the freight/fares. In Punjab, fares of intercity and intra-city public transport were reduced by 8 to 10pc in February.

The Punjab government has imposed fines of Rs32 million from November to date. Similarly, 3,380 FIRs have been registered against shopkeepers for overcharging and 4,012 price offenders have been arrested in the province.

In Sindh, transport fares fell by 8pc in January and 5pc in February, respectively. Task forces have also been constituted to monitor prices of wheat flour and meat. The government has also established complaint centres in each district under the supervision of concerned assistant commissioners.

The Sindh government fined 30,601 profiteers and 1,206 were imprisoned last year. The Sindh government registered 862 storages of essential commodities under the Sindh Government Registration Act, 1995 and maintaining record of commodities.

The Khyber Pakhtunkhwa government has cut fares of diesel vehicles by 20pc. Inspection teams in the province imposed fines worth Rs2.7m on 650 shopkeepers. Inspectors checked 4,969 shopkeepers in January.

Core inflation — which is measured by excluding food and energy prices — slowed for the fifth consecutive month by 0.2pc to 6.2pc in February compared to 6.4pc in the previous month. The fall also encouraged the State Bank of Pakistan (SBP) to lower its key policy rate to 8.5pc from 9.5pc in its last monetary policy.

As a result of low inflation, the government also made drastic cut in the export refinance rate and long-term financing facility to make exports competitive.

In February, total food inflation rose to 2.1pc from a year ago, non-perishable food items to 0.46pc and perishable items to 0.35pc.

The food items whose price increased included tea (0.75pc), tomatoes (0.68pc), sugar (0.67pc) and pulse mash (0.60pc).

On the other hand, year-on-year non-food inflation was 4pc in February. However, it was -0.3pc when compared with the previous month.

The international oil price dipped to its lowest level of around $47 a barrel during the previous month.

The non-food items whose prices rose included personal equipment (1.28pc) and construction wage rates (1.07pc).

Average inflation measured through Sensitive Price Index (SPI) was 2.77pc in July-Feb 2014-15 and inflation measured by Wholesale Price Index (WPI) was 0.87pc.

Published in Dawn March 3rd , 2015

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