ISLAMABAD: Inflation eased to 8.3 per cent in November, from 8.9pc in October on the back of a slight decline in the price of perishable products, showed data released by the Pakistan Bureau of Statistics on Tuesday.
Slight deceleration in inflation was noticed for the second consecutive month despite the fact that prices of essential food items are still on an upward trajectory.
Food inflation is still in the double-digits, posting a rise in the outgoing month.
Higher food prices continued to exert upward pressure on inflation as prices of food group rose 13pc year-on-year and 1.6pc month-on-month in November in urban areas. The situation is worse in rural areas where prices of food group rose 16.1pc YoY and 2pc MoM in November.
The prices of essential food items — tomatoes, onions, chicken, eggs, sugar and wheat — have seen consistent increase over the last couple of months. Having maximum share in the food basket, a slight increase in kitchen items raises overall inflation.
Year-on-year in November, wheat price went up by 36.6pc, wheat flour 13.28pc, rice 7.3pc, eggs 48.67pc and sugar 35.78pc.
The government has imported wheat and sugar to bridge shortfall and improve its supplies in the market. The inflation is expected to recede further with the arrival of new crops of vegetables, sugar crushing season, and marginal decline in the petroleum prices.
Pakistan wheat import stood at 898,904 metric tonnes between July and October against no import last year. Similarly, sugar imports stood at 226,675 metric tonnes during the period under review as against 1,678 metric tonnes last year.
With shortages in domestic production, inflation at the beginning of the current fiscal year stood at 9.3pc in July, easing down to 8.2pc in August before rebounding to 9pc in September.
The average CPI between July and November eased from last year’s 10.8pc to 8.76pc this year. The average CPI in FY20 rose to 10.74pc, from 6.8pc in the year before — highest since 2011-12 when it stood at 11.01pc.
In urban areas, food items that saw a jump in prices this month from previous included chicken 21.36pc, tomatoes 15.68pc, potatoes 8.79pc, onions 5.81pc, vegetables 5.63pc, dry fruits 4.38pc, eggs 2.83pc, butter 2.61pc, condiments and spices 2.6pc and fish 1.89pc.
The items whose prices declined in urban areas were wheat flour, down 4.83pc, wheat 4.1pc, pulse moong 3.54pc and pulse gram 1.94pc.
In rural areas, chicken higher by 20.76pc, potatoes 15.8pc, tomatoes 9.29pc, onions 6.56pc, sugar 5.39pc, eggs 5.23pc, condiments and spices 3.05pc and butter 1.46pc.
On the other hand, drag on price levels came from gur 5.06pc, besan 2.28pc, pulse moong 2.26pc, fruits 2.21pc, wheat flour 1.92pc, pulse mash 1.82pc, pulse gram 1.76pc, beans 1.17pc and fish1.12pc.
Meanwhile, non-food inflation in urban centres was recorded at 3.4pc YoY and 0.1pc MoM basis, whereas in rural areas, it rose by 5.5pc and 0.2pc respectively.
The urban consumer price index covers 35 cities and 356 items, while the rural one tracks 27 centres and 244 products. The former grew by 7pc YoY in November whereas the latter jumped by 10.5pc.
Core inflation in urban areas was stagnated at 5.6pc in November at the previous month level. In rural areas, the corresponding eased to 7.4pc from 7.6pc.
The central bank determines the key policy rate, currently at 7pc, based on the core inflation rate. The State Bank of Pakistan has reduced the rate by a cumulative 625 basis points since March 17 to combat uncertainty amid the coronavirus pandemic.
Average inflation measured by the sensitive price index eased to 9.9pc during November from 12.3pc during the previous month, while the wholesale price index fell slightly from previous month’s 5.1pc to 5pc in November.
Published in Dawn, December 2nd, 2020