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Consumer inflation nears 5pc

Updated April 04, 2017

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ISLAMABAD: Annual inflation edged up to 4.9 per cent in March from 4.2pc in the preceding month on the back of increase in prices of petroleum and perishable products.

Inflation rose 0.8pc month-on-month in March compared to a 0.3pc increase in the previous month and 0.1pc in March 2016, according to figures released by the Pakistan Bureau of Statistics on Monday.

The main inflation is measured through Consumer Price Index (CPI), which tracks prices of around 480 commodities every month in urban centres across the country. Average annual inflation in the first nine months, i.e. from July to March, of the current fiscal year stood at 4.01pc against 2.64pc in the same period a year ago.

The annual inflation target for the current fiscal year is 6pc. In the preceding fiscal year, average annual inflation was recorded at 2.86pc.

Inflation in the food group, whose weight in the CPI basket is 34.83pc, stood at 5pc in March. On a month-on-month basis, food inflation increased 1.9pc in March due to an increase of 12.5pc in the prices of perishable and 0.44pc in non-perishable products.

Food items whose prices increased the most in March were tomatoes 68.43pc, chicken 21.6pc, onion 18.16pc, potatoes 15.48pc, fresh fruit 12.52pc, and tea 5.1pc. Core inflation, measured by excluding the volatile food and energy prices, was recorded at 5.3pc in March, up 0.1pc from the preceding month. Core inflation has remained subdued since November 2015 because of a tighter monetary policy and reduction in food and fuel prices.

Government borrowing is one of the key factors influencing the trend of core inflation as there is a positive relation between the two.

Non-food inflation was recorded at 4.9pc in March, an increase of 0.1pc over the preceding month. Within the group, motor fuel prices went up by 1.4pc during the month. The education and health indices rose 10.9pc and 13.8pc, respectively, in March on a year-on-year basis. An increase of 12.4pc was witnessed in the index of alcoholic beverages and tobacco.

The index of clothing and footwear rose by 3.56pc and that of housing, water, electricity, gas and other fuels by 4.83pc. Meanwhile, the Sensitive Price Index edged up 1.42pc and the Wholesale Price Index rose 3.79pc in March.

Published in Dawn, April 4th, 2017