Daily Times - KARACHI: Pakistan’s consumer price index (CPI), a key indicator of inflation, rose 13.68 percent in January 2009-10 over the previous year, official statistics indicated on Wednesday.
The growth in the inflation reversed the declining trend in the previous months when inflation’s growth decelerated. The inflationary pressures in month of January could be attributed mainly to electricity and petroleum prices hike in the last month, which fuelled the inflation to post growth over the previous year.
The growth in the inflation reversed the declining trend in the previous months when inflation’s growth decelerated. The inflationary pressures in month of January could be attributed mainly to electricity and petroleum prices hike in the last month, which fuelled the inflation to post growth over the previous year.During July-January of current fiscal, CPI also rose 10.79 percent over the corresponding months of previous year.
Analysts said during Jan-10, the government increased electricity and petroleum prices by an average of 12 percent and 10 percent respectively as one-time adjustment due to subsidy elimination for fiscal stability.
The increased prices directly impacted over inflation (cumulative weight of 6.3 percent in CPI basket). Conversely, indirect impact in terms of uneven increase in the transportation cost had negative impact on inflation outlook in the short term.
Food inflation registered 15.49 percent growth during the period under review. Non-perishable food item prices increased 14.76 percent whereas perishable food items recorded 21.30 percent increase in their prices.
Fuel & lighting index rose 20.19 percent during January this over the last year whereas house rent index posted 13.38 increase this month.
Transport & communication index rose 9.43 percent, education expenses increased 13.68 percent and medical expenses increased 5.88 percent.
The detailed analysis of the SPI prices for Jan-10 reveals that few items, within the food category, were observed to post over 100bps MoM increase in prices. Sugar (1.92 percent weight in the CPI) remained exceptional with 19 percent MoM increase and food prices (40.3 percent weight in the CPI) contributed passively this time around to the CPI in Jan-10 due to being relatively stable.
Early this financial year, government estimated that the inflation would be curtailed at single digit but tariff increase in energy sector for removing subsidy has dampened the efforts to contain the inflation and provide relief to masses.
Analysts said an upsurge in oil prices will remain a risk to domestic inflation along with further expected deprecation in Pak rupee against US dollar and felt the upcoming surge in inflation will force the State Bank of Pakistan (SBP) to maintain its stance in forthcoming monetary policy.
The State Bank of Pakistan kept the discount rate unchanged in the last monetary policy statement at 12.5 percent owing to expected rise in CPI inflation and the impact of law and order situation.
Sensitive Price Index (SPI) and Wholesale Price Index (WPI) also rose 18.35 and 19.64 percent respectively during month of January over last year.
Source - Daily Times
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