Rising food prices behind inflationary pressures: SBP

Published July 12, 2020
Despite ample production of general food items, both rural and urban consumers paid higher prices in the outgoing fiscal year.
Despite ample production of general food items, both rural and urban consumers paid higher prices in the outgoing fiscal year.

KARACHI: Rising food prices were the major driving force behind inflationary pressures as the group’s weighted contribution in the CPI basket jumped to 52.2 per cent in May compared to 37.6pc in the corresponding month of 2019, the State Bank of Pakistan’s (SBP) Inflation Monitor for May showed on Saturday.

The monitor also provided details on inflation trends in urban and rural areas. In both regions, they were dominated by food price escalation which ate up a major chunk of the masses’ income.

The weighted contribution of food group in the overall urban CPI inflation increased to 52.2pc during May from 48.3pc in April, 2020. The weighted contribution of non-food groups witnessed sharp decline during the year to 47.8pc in May from 62.4pc in the same month last fiscal year.

“Non-food group was 62.4pc during corresponding month (May 2019) of last year,” said the SBP adding that the non-food contribution in the CPI basket was 51.7pc in April 2020.

Despite ample production of staple foods like wheat and rice, enough to meet the local demand, consumers continue to pay high prices for these items at times even higher than those in the international market. Often, wheat prices in Pakistan are higher than international prices.

For rural basket, the weighted contribution of food group in the overall rural CPI inflation increased to 63.8pc during May compared to 52.4pc in the same month of last year. The CPI for April was 58.8pc.

According to the SBP report, the weighted contribution of non-food group decreased to 36.2pc in May from 41.2pc in the previous month whereas its share was 47.6pc during corresponding month last year, said the SBP.

After the spread of Covid-19 in March, the government opted for shutdown to contain the virus. The shutdown immediately caused joblessness on a large scale particularly for the daily wagers. At the same time, food prices increased across the country while a shortage was also noted in some places.

Published in Dawn, July 12th, 2020

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Yearly trouble
Updated 25 Oct, 2024

Yearly trouble

Both Pakistan and India need a strategy that not only penalises harmful practices but also provides long-term solutions.
Countering cybercrime
25 Oct, 2024

Countering cybercrime

THE new National Cyber Crime & Investigation Authority appears to have landed in limbo, with the authorities...
Controversial guest
25 Oct, 2024

Controversial guest

INDIAN preacher Dr Zakir Naik is not known for his subtle approach to faith. Controversies have surrounded him for...
Curtain call
Updated 24 Oct, 2024

Curtain call

There is hope that under Justice Afridi, SC can move beyond the discord and heal the fractures that developed under CJP Isa’s watch.
IMF’s estimate
24 Oct, 2024

IMF’s estimate

THE IMF’s economic growth projection of 3.2pc for Pakistan falls short of the 3.5pc target that the government has...
Religious exchanges
24 Oct, 2024

Religious exchanges

STRAINED relations between Pakistan and India prevent followers of different faiths from visiting sacred sites on ...