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Inflation eases to 6.5pc

Updated December 05, 2018


November’s lower-than-expected inflation was mainly attributable to decline in prices of vegetables and fruits.
November’s lower-than-expected inflation was mainly attributable to decline in prices of vegetables and fruits.

ISLAMABAD: After touching record four-year high last month at 6.78 per cent, the Consumer Price Index (CPI) based inflation eased to 6.5pc in November, according to data released by the Pakistan Bureau of Statistics (PBS) on Tuesday.

November’s inflation was held back by slower than expected month-on-month increase in average prices of the essential items — especially a sharp decline in fresh vegetables and higher-than-expected drop in fresh fruits — at major urban centres.

The CPI increased 6.78pc in October – 50-month highs — after clocking in at 5.12pc in September. In the outgoing five months, CPI averaged at 6pc compared to 3.59pc during the same period last year.

Central bank’s tightening monetary policy has come on the back of rising inflation amidst depreciating rupee and high global crude prices during the last two years.

Policy rates are already at their six-year highs, after the State Bank of Pakistan raised the rate by 150 basis points to 10pc in the last monetary policy announcement made on 30 Nov. The central bank has raised interest rates by 4.25pc since January, 2018.

During the month under review, food inflation was up 1.8pc on an annual basis but dipped 0.5pc month-wise. Prices of nonperishable food items were up 1.23pc while those of perishable products fell by 10.84pc.

Food items whose prices increased the most in November include chicken up 15pc, eggs 10pc, potatoes 7pc, pistachio 4pc and fish rahu 4pc.

In the same category, however, tomatoes dipped 44pc, peas 42pc, cauliflower 41pc, turnip 38, radish 37pc, carrot 23pc, cucumber 22pc, karaila 20pc, brinjal 14pc, malta 12pc, chilies green 11pc and guava 8pc.

On the other hand, non-food inflation went up 9.8pc and 0.5pc on yearly and monthly basis respectively. In the non-food items, price of Dettol soap increased 8.5pc, diesel 6pc, sweater gents 6pc and petrol 5.7pc. In the same category, LPG prices dropped 7.64pc.

The non-food prices also remained under pressure on account of 10pc rise in education index, followed by 7.5pc increase in clothing and footwear and 9.11pc in housing, water, electricity, gas and other fuel during the period under review.

Published in Dawn, December 5th, 2018