ISLAMABAD: The annual inflation dropped to a six-and-a-half-year low of 4.9 per cent in November, down from 7.2pc in October, mainly due to a decrease in the prices of perishable food products.

The headline inflation, measured by the Consumer Price Index (CPI), had slowed to 9.6pc in August, the first single-digit reading in more than three years, according to data released by the Pakistan Bureau of Statistics on Monday.

The inflation has fallen since August, reaching its lowest point in November. The sharp deceleration in inflation is partly attributed to a high-base effect from last year, when annual inflation stood at 29.2pc in November 2023.

Improved crop yields, particularly of wheat, rice and sugar, helped reduce food prices this year, alongside a lower reliance on imports. The government’s support for agriculture, including increased loans and favourable weather, played a crucial role in boosting production.

The CPI inflation crossed 10pc in November 2021 and remained in double digits for 33 consecutive months until July. In between, it peaked at 38pc in May 2023, driven by unprecedented food and energy prices.

In the first five months of the current fiscal year (July-November), inflation averaged 7.88pc compared to 28.62pc during the same period last year. Analysts attributed the decline to lower global commodity prices, stable exchange rates and better agricultural outputs.

The IMF’s forecast for CPI inflation was 12.7pc for FY25, now revised as 9.5pc, showing a downward revision of 3.2pc.

In November, urban and rural inflation was 5.2pc and 4.3pc year-on-year.

Food, core inflation

Food inflation for November stood at 1.7pc in urban areas and -0.2pc in rural areas, whereas non-food inflation was 7.8pc in urban areas and 9.1pc in rural areas. Food inflation was 9.4pc in October 2021. Since then, food inflation has progressively increased, with the greatest level reported in May 2023 at 48.1pc.

Core inflation, which strips out volatile food and energy prices, was recorded at 8.9pc in urban areas and 10.9pc in rural areas.

In the past 12 months, core inflation in urban areas was recorded at 18.4pc in July 2023, before gradually declining to 8.9pc in November.

Main contributors

In urban areas, the food items whose prices saw the month-on-month (MoM) decline in November included chicken (16.94pc), pulse mash (7.36pc), fresh vegetables (7.17pc), fresh fruits (6.73pc), pulse gram (4.33pc), onions (3.03pc), condiments and spices (2.81pc), sugar (2.43pc), gur (2.06pc), gram whole (1.52pc), pulse masoor (1.24pc), rice (0.86pc) and wheat products (0.48pc).

The MoM increase was recorded in prices of tomatoes (26.56pc), eggs (11.83pc), pulse moong (11.15pc), honey (10.34pc), potatoes (8.64pc), mustard oil (7.48pc), vegetable ghee (4.69pc), butter (3.49pc), dry fruits (3.05pc), fish (2.96pc), cooking oil (2.41pc), beans (2.35pc), wheat (2.11pc), readymade food (1.60pc), sweetmeat (1.21pc), beverages (1.02pc), wheat flour (0.89pc), meat (0.61pc), milk products (0.45pc), milk powder (0.17pc), milk fresh (0.15pc) and besan (0.07pc).

In urban areas, the non-food items whose prices saw the highest MoM increase in November included footwear (12.36pc), liquified hydrocarbons (8.95pc), woollen readymade garments (6.91pc), electrical appliances for personal (5.21pc), drugs & medicines (4.42pc) and solid fuel (4.08pc).

Published in Dawn, December 3rd, 2024