KARACHI: Headline inflation for January is likely to hover around 12.7-13 per cent, up 40-70 basis points from a month ago, analysts said on Friday.

Along with Omicron and external pressures on account of higher imports, double-digit inflation is one of the main emerging risks to the economic growth trend, according to the Ministry of Finance.

The consumer price index (CPI) rose 12.3pc last month, marking a 22-month high owing to higher food prices, increase in energy tariffs and upward revision in the rates of petroleum products. Ismail Iqbal Securities Ltd Head of Research Fahad Rauf told Dawn he expects inflation to record a relatively small increase in January to reach 12.7pc. For the full fiscal year that will close on Jan 30, he foresees headline inflation at 11pc while the central bank expects the reading to be 9-11pc.

“An increase in petroleum prices along with the house rent revision is going to push inflation up for January,” he said. However, food inflation generally goes down every January for seasonal reasons, he noted. The fuel price adjustment this month also brought the electricity tariff down, which will help offset the negative impacts of the rent and petrol price hikes, Mr Rauf added.

Meanwhile, APP reported the sensitive price indicator (SPI) went down 0.11pc on a week-on-week basis for the seven-day period that ended on Jan 27.

Data released by the Pakistan Bureau of Statistics (PBS) showed the food commodities that contributed to the decline in weekly inflation measured by the SPI included chillies and potatoes. Their prices decreased 9.05pc and 4.03pc, respectively, on a weekly basis.

Other commodities that witnessed declines in their prices included onions (2.86pc), eggs (2.19pc), chicken (1.71pc), sugar (1.14pc), bananas (0.61pc) and LPG (2.04pc).

Meanwhile, commodities that witnessed price increases on a week-on-week basis included tomatoes (30.79pc), garlic (4.51pc), tea prepared (1.71pc), mustard oil (1.28pc), pulse gram (1.18pc) and five-litre cooking oil (1.18pc). The SPI for the lowest consumption group witnessed a 0.07pc decrease last week.

Prices of 17 of the 51 items (33.33pc) increased while those of eight items (15.69pc) decreased during the week under review. Prices of 26 or 50.98pc items remained stable during the seven-day period, PBS data showed.

Published in Dawn, January 29th, 2022