ISLAMABAD: The annual inflation maintained a decelerating trend, hitting a nine-year low at 2.4 per cent year-on-year in January, mainly due to a decline in prices of perishable food products.
The headline inflation, measured by the Consumer Price Index (CPI), decreased to 9.6pc in August 2024, the first single-digit figure in more than three years, and the path of slowing down continued in the following months, according to data released by the Pakistan Bureau of Statistics on Monday.
However, there is a rising trend in the prices of sugar, vegetables and edible oils in the domestic market despite declining prices in the international market. The government has allowed sugar exports, especially to Afghanistan, on the plea of surplus stock.
The CPI inflation surged above 10pc in November 2021 and remained in double digits for 33 consecutive months until July 2024. In between, it peaked at 38pc in May 2023, driven by unprecedented food and energy prices.
PM claims govt policies benefiting ordinary people
The current situation in Pakistan reflects disinflation, which signifies a slowdown in inflation. In contrast, deflation occurs when the general price levels decline.
According to the Pakistan Bureau of Statistics, the average accumulative inflation over the last 48 months increased by 82pc, reflected in the retail prices of all consumer items during the period under review. This low inflation does not reflect that the cost of living has come down.
In a statement, Prime Minister Shehbaz Sharif said the slowdown in inflation was a positive move, and lower food costs were benefiting ordinary people.
The premier explained that the declining inflation resulted in favourable growth across all sectors, confirming that the government’s economic policies and actions were on the right track.
In the first seven months of FY25 (July-January), inflation averaged 6.50pc compared to 28.73pc during the same period last year. Analysts attributed the decline to lower global commodity prices, stable exchange rates, higher base effect and better agricultural outputs.
Food, core inflation
Food inflation for January recorded a negative growth of 0.6pc in urban areas and -2.9pc in rural areas, whereas non-food inflation was 5pc in urban areas and 7pc in rural areas. Food inflation was 9.4pc in October 2021. Since then, food inflation has progressively increased, with a record 48.1pc reported in May 2023.
Interestingly, the PBS index shows a dropping trend in food. However, the retail price of food products, except wheat flour and wheat, did not decrease in the open market for consumers.
Core inflation, which strips out volatile food and energy prices, was recorded at 7.8pc in urban areas and 10.4pc in rural areas in January. In the past 13 months, core inflation in urban areas was recorded at 18.4pc in July 2023.
Published in Dawn, February 4th, 2025
