Inflation edges up to 8.7pc in February

Published March 2, 2021
KARACHI: Customers check out dried fruits at a spice store in Jodia Bazaar on Monday. — Fahim Siddiqi / White Star
KARACHI: Customers check out dried fruits at a spice store in Jodia Bazaar on Monday. — Fahim Siddiqi / White Star

ISLAMABAD: The month of February saw a rebound in prices of consumer items as inflation edged up to 8.7 per cent from 5.7pc in January, data released by the Pakistan Bureau of Statistics on Monday showed.

On a month-on-month basis, inflation increased by 1.8pc mainly due to an increase in prices of cooking oil, pulses, petroleum products and electricity charges for end consumers.

The non-food inflation has steadily been on the rise for the past few months due to higher energy prices.

No official word came from any cabinet ministers over the inflation rebound in the month of February. Minister for Industries Hammad Azhar has been giving assurances on a weekly basis to the National Prime Monitoring Committee about steps to contain the vegetable ghee and cooking oil prices.

However, no respite has seen in cooking oil/vegetable prices. Instead, price of vegetable ghee has been increased at the Utility Stores Corporation.

Higher cooking oil, ghee and energy prices main contributors

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. Since September, inflation has been on a downward trajectory, giving some relief to end consumers.

Average CPI eases

A few consumer items as well as energy prices pushed up inflation in February again. As a result, food inflation enters double digits in both urban and rural areas. There are food items prices of which are still on an upward trajectory. The average CPI in the eight months — between July and February — eased from last year’s 11.71pc to 8.25pc this year.

Higher food prices pull up inflation as prices of food group rose 10.3pc year-on-year and 1.3pc on month-on-month in February in urban areas. The situation is almost the same in rural areas where prices of food group rose 9.1pc YoY and a 0.2pc MoM in February.

The MoM increase indicates that prices of essential food items will see a further rise in the next month. The weekly prices also show an upward movement which will drag monthly inflation.

The government has imported wheat and sugar to bridge shortfalls and improve its supplies in the market. With the arrival of tomatoes and onions in the domestic market, its prices posted a decline during the past month under review.

Pakistan imported $4.64bn worth food items in seven months this year as against $3.05bn over the corresponding months of last year, showing an increase of 52pc. Food items were imported in bulk to bridge the domestic shortfalls of wheat, sugar, pulses, tea and oil.

Pakistan’s wheat imports stood at 2.91 million tonnes between July and January against no imports last year. Similarly, sugar imports stood at 278,482 tonnes during the period under review as against 7,338 tonnes last year.

In urban areas, food items that saw a jump in prices this month from previous month included chicken 37.01pc, cooking oil 11.92pc, fruits 9.26pc, vegetable ghee 9.03pc, condiments and spices 5.50pc, pulse gram 4.48pc, mustard oil 3.80pc, pulse masoor 3.28pc, pulse mash 2.62pc, and rice 1.20pc.

The items whose prices declined in urban areas were tomatoes, down 58.7pc, potatoes 12.92pc, eggs 10.38pc, onions 7.88pc and vegetables 7.35pc.

In rural areas, chicken higher by 31.54pc, fruits 9.92pc, vegetable ghee 7.05pc, cooking oil 5.58pc, mustard oil 3.76pc, pulse gram 2.46pc, pulse masoor 1.57pc, pulse moong 1.18pc, rice 1.18pc and pulse mash 1.01pc.

However, the price of tomatoes decreased 56.33pc, eggs 18.41pc, potatoes 17.48pc, onions 8.30pc, vegetables 6pc and wheat flour 1.10pc.

Meanwhile, non-food inflation in urban centres was recorded at 7.6pc YoY and 2.8pc MoM basis, whereas in rural areas, it rose by 8.6pc and 2pc, respectively. The increase in non-food inflation is because of an increase in petroleum products prices.

In urban areas, the items that saw increase in the month were electricity charges which went up 29.45pc, footware 14.66pc, motor fuel 1.64pc, readymade garments 2.93pc, cotton cloth 2.52pc, and hosiery 1.97pc, respectively.

Published in Dawn, March 2nd, 2021

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