ISLAMABAD: Consumer prices continued to surge unabated in August, with the second month of the current fiscal year witnessing inflation at an elevated level of 27.4 per cent, mainly due to soaring energy prices that show no signs of relenting.
However, it recorded a marginal deceleration from 28.3pc in July, attributed to a slight decline in perishable food prices. On a month-on-month basis, inflation, measured by the Consumer Price Index (CPI), increased by 1.7pc in August, showed data released by the Pakistan Bureau of Statistics on Friday.
Inflation in August was primarily driven by significant increases in the prices of essential food items. Wheat flour saw a staggering surge of 99.68pc, while rice experienced a notable rise of 66.82pc.
Additionally, chicken prices soared by 67.56pc, and sugar witnessed a substantial increase of 70.64pc. These notable spikes in the cost of items within the food basket contributed significantly to the overall inflation rate for the month.
The gas prices saw a surge of 62.82pc, electricity charges 8.24pc and motor fuel 21.02pc on a year-on-year basis.
The International Monetary Fund has forecast the average CPI inflation for FY24 to be 25.9pc, a significant easing from the previous year’s 29.6pc. The government has set an annual inflation target of 21pc for the current fiscal year.
According to the latest IMF report, inflation is expected to dip below 20pc only in the fourth quarter of FY24.
In FY23, the annual inflation remained at 29.18pc and surpassed its budgetary target of 11.5pc owing to the unprecedented rupee depreciation, increased domestic taxes, and rising global commodity prices. Inflation was recorded at 12.15pc in FY22.
Inflation has been rising since mid-2022 after the PML-N-led government took harsh measures as demanded by the IMF to unlock stalled funding. Inflation is expected to go up in September owing to an unprecedented rise in petroleum products prices and electricity rates, with currency depreciations also contributing to the inflationary pressure.
Food inflation for August reached 38.08pc in urban and 40.6pc in rural areas. Non-food inflation stood at 16.3pc in urban and 22pc in rural areas.
Non-perishable food items saw a 1.49pc increase in August, while perishable food items experienced an 8.75pc decline on a week-on-week basis.
Core inflation, which excludes food and energy prices, reached 18.4pc in urban areas and 25.9pc in rural areas. The government has raised the interest rate to the highest level in the country’s history, reaching 22pc.
In urban areas, food items whose prices rose the most in August compared to last year were wheat flour (99.68pc), tea (94.50pc), condiments and spices (75.14pc), sugar (70.64pc), chicken (67.56pc), rice (66.82pc), wheat (64.17pc), potatoes (59.71pc), wheat products (59.03pc), beans (50.36pc), dry fruits (48.80pc), beverages (46.43pc), milk powder (44.39pc), pulse mash (32.40pc), milk products (31.49pc), milk fresh (29.25pc), pulse moong (27.59pc), tomatoes (23.17pc), gram whole (16.56pc), cooking oil (3.45pc) and pulse gram (2.35pc).
Published in Dawn, September 2nd, 2023