ISLAMABAD: The pace of price rises slightly dipped in September, bringing down the annual inflation rate to 23.2 per cent, a figure still the highest in 13 years and also way above 9pc in the same month a year ago, official data showed on Saturday.
Headline inflation — measured by the Consumer Price Index (CPI) — stood at 27.26pc, the highest in 49 years, in August this year and 9pc in September 2021, according to data released by the Pakistan Bureau of Statistics (PBS).
Inflation in September was driven by a double-digit annual increase in almost all sub-indices, especially transport and perishable food items.
Besides, urban and rural inflation increased to 21.2pc and 26.12pc year-on-year, respectively.
On month-on-month, the CPI dropped 1.2pc, data showed. This decrease mainly came on the back of a decline in non-food inflation, particularly a 17.7pc fall under the head of “housing, water, electricity, gas and fuel”.
Annual CPI slightly eases to 23.2pc, recorded at -1.2pc month-on-month
Annual CPI inflation has been on the rise after fuel prices skyrocketed since the last week of May, as the new coalition government scrapped costly fuel subsidies to tame the surging fiscal deficit and revive a stalled IMF loan programme.
As a result, headline inflation, which stood at 13.8pc in May, jumped to 21.3pc in June, 24.9pc in July, 27.3 in August and now 23.2pc in September.
According to the PBS, September inflation in urban and rural areas increased to 21.2pc and 26.1pc year-on-year, respectively. The inflationary trend was driven by a double-digit increase in almost all sub-indices, especially transport, food and housing, and utilities.
On a year-on-year basis, the transport index saw the biggest rise of 64.49pc in September, followed by perishable food items 50.30pc, non-perishable food items 28.76pc, alcoholic beverages and tobacco 32.67pc, restaurants and hotels 28.81pc, furnishing and household equipment maintenance 25.06pc, recreation and culture 22.76pc, clothing and footwear 17.70pc.
Other categories included miscellaneous goods and services 22.86pc, health 13.77pc, education 9.97pc, and communication 1.29pc.
Apart from CPI, other inflationary indicators like the Sensitive Price Indicator (SPI) and Wholesale Price Index (WPI) also saw substantial spikes in September. SPI rose to 30.23pc in September this year from 16.25pc the same month last year. WPI stood at 39.55pc compared to 18.02pc a year ago.
In its Monthly Economic Update and Outlook for September, the finance ministry said Pakistan was facing a severe economic and humanitarian crisis due to the devastating floods this year.
The government was alleviating the effects of the rupee’s depreciation and agricultural destruction by prompt measures, including countering price speculation and providing sufficient supplies by allowing trade from neighbouring countries, it said.
“Still, the risk of second-round effects of recent inflationary shocks persists, which may work themselves through the markets”, it further said.
Official data showed that food inflation remained on the higher side in September, as it shot up to 30.8pc year-on-year and 5.2pc month-on-month in urban areas, whereas the respective growth in prices in rural areas was 32.7pc and 5.7pc — a reversal of the trend where urban areas usually experience higher food prices.
Food items whose prices rose in September compared to the previous month included tomatoes (33.86pc), vegetables (22.70pc), pulse moong (19.53pc), potatoes (17.43pc), wheat (15.35pc), eggs (14.20pc), chicken (13.05pc), tea (11.59pc), besan (9.74pc), cigarettes (8.21pc), pulse gram (6.90pc), pulse mash (6.25pc), beans (3.21pc) and milk (2.96pc).
In urban areas, however, the prices of vegetable ghee declined by 4.50pc, onions 3.86pc, pulse masoor 3.08pc, cooking oil 1.89pc and sugar 0.93pc.
Non-food inflation in urban centres increased to 15.2pc year-on-year and declined 6.6pc month-on-month, whereas, in rural areas, it rose to 20.1pc on an annual basis and declined 4.9pc month-on-month, respectively. The increase in non-food inflation was mainly driven by unprecedented rising oil prices.
In the non-food category, the items whose prices saw an increase in September from the previous month included washing soap/detergents/match box (8.30pc), liquefied hydrocarbons (6.34pc), stationery (6.01pc), motor vehicle accessories (5.22pc), plastic products (5.14pc), motor fuel (3.19pc), furniture and furnishing (2.22pc) and construction input Items (1.71pc).
The core inflation in urban areas was 14.4pc in September against 13.8pc the previous month. In rural areas, the increase was 17.6pc against 16.5pc. This shows that the increase in interest rates also could not stop the upward trend in core inflation.
Published in Dawn, October 2nd, 2022