Salman Khan
Salman Khan

ISLAMABAD: April saw a double-digit increase in prices of consumer items as inflation edged up to 11.1 per cent from 9.1pc in March, showed data released by the Pakistan Bureau of Statistics on Saturday.

Inflation entered a double-digit figure after a gap of 12 months though it fell to 5.7pc in January 2021. It is mainly driven by double-digit growth in food inflation in both urban and rural areas.

On a month-on-month basis, inflation increased by 1pc mainly due to an increase in prices of chicken, cooking oil/ghee, sugar, wheat, and pulses for the end consumers. At the same time, non-food inflation has steadily been on the rise for the past few months due to higher energy prices.

The average CPI (Consumer Price Index) in 10 months — between July and April — eased from 11.22pc last year to 8.62pc this year.

PBS sees rising food prices behind 11.1pc inflation in April

The month of April coupled with start of fasting in the middle of the month noted an accelerated growth in prices of vegetables, fruit, chicken and oil especially in the province of Punjab, followed by Sindh, Balochistan, Islamabad and Khyber Pakhtunkhwa.

At the beginning of the current fiscal year, inflation was recorded at 9.3pc in July, easing down to 8.2pc in August before rebounding to 9pc in September. From September, inflation went on a downward trajectory, giving some relief to the end consumers.

However, it rebounded in February. A few consumer items as well as energy prices pushed up inflation in March again, with the result that food inflation entered double digits in both urban and rural areas. There are food items prices of which are still on an upward trajectory.

Higher food prices especially with the start of Ramazan pulled up inflation as prices of food group rose 15.7pc year-on-year basis and 2.7pc month-on-month basis in April in urban areas. The situation is almost the same in rural areas where prices of food group have risen to 14.1pc year-on-year basis and 0.9pc month-on-month basis in April.

The month-on-month increase indicates that prices of essential food items will see a further rise next month, as the weekly prices also show an upward movement that will drag monthly inflation.

The government has imported wheat and sugar to bridge shortfalls and improve supplies in the market. Between July and March, the government imported 3.612 m tonnes of wheat this year against zero import of last year.

Similarly, the import of sugar stood at 279,529 tonnes during the nine months of current fiscal year as against 4,751 tonnes over the corresponding period of last year, showing an increase of 5,783pc.

With the arrival of potatoes and onions in the domestic market, their prices posted a decline during the previous month under review. However, prices of potatoes, onions, tomatoes and fruits skyrocketed with the start of Ramazan.

In urban areas, food items that saw a jump in prices in April from the previous month included tomatoes 67.70pc, vegetables 29.55pc, fruits 22.32pc, potatoes 15.81pc, chicken 7.31pc, cooking oil 2.99pc, vegetable ghee 2.01pc, meat 1.64pc, condiments and spices 1.54pc, and gram whole 1.25pc.

The items whose prices declined in urban areas were wheat 9.14pc, onions 8.33pc, wheat flour 1.94pc, sugar 1.83pc and pulse moong 1.59pc.

In rural areas, tomatoes prices are higher by 55.54pc, fruits 25.20pc, vegetables 21.71pc, potatoes 12.15pc, cooking oil 2.25pc, vegetable ghee 1.83pc, meat 1.59pc and mustard oil 1.15pc. However, the prices of onions decreased by 14.47pc, wheat 10.23pc, sugar 3.13pc, pulse masoor 2.57pc, besan 2.24pc, pulse moong 1.68pc, wheat flour 1.56pc and chicken 1.12pc.

Non-food inflation in urban centres was recorded at 8.2pc year-on-year increase and 0.5pc month-on-month increase, whereas in rural areas it rose by 8.9pc and 0.3pc, respectively. The month-on-month increase in non-food inflation indicates a further increase in coming months.

The urban CPI covers 35 cities and 356 items, while the rural one tracks 27 centres and 244 products. The former grew by 11pc year-on-year in April whereas the latter jumped by 11.3pc.

Core inflation in urban areas was recorded at 7pc in April, compared to 6.3pc in the previous month. In rural areas, it edges up to 7.7pc in April from 7.3pc in the previous month.

The State Bank of Pakistan determines the key policy rate, currently at 7pc, based on the core inflation rate. The central bank 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 surged to 21.3pc in April from 18.7pc during the previous month. On month-on-month basis, it increased by 2.6pc in April.

The Wholesale Price Index (WPI) was slightly up from the previous month’s 14.6pc to 16.6pc in April, showing month-on-month increase of 2pc.

Published in Dawn, May 2nd, 2021

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