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Alarms raised as food prices push CPI inflation to record 38% in May

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  • Inflation clocks in 1.6% on month-on-month basis.
  • AHL says reading takes 11MFY23 average inflation to 29.2%.
  • Pakistan’s inflation outstrips Sri Lanka’s annual rate of 25.2% in May.

The consumer price index (CPI)-based inflation rate in Pakistan surged to a record 38% on a year-on-year (YoY) basis in May 2023, the highest since July 1965 — barring a few years in between due to the non-availability of monthly records).

Pakistan Bureau of Statistics (PBS) data showed that CPI-based inflation hit 36.4% in April 2023, while it increased 1.6% in the month of May month-on-month (MoM).

“This reading takes 11MFY23 average inflation to 29.2% compared to 11.3% in 11MFY22,” brokerage Arif Habib Limited noted in a report.

The food inflation in urban areas jumped by a whopping 48.1% in May 2023 compared to May 2022, while the rural areas saw a 52.4% increase in consumer prices year-on-year.

Arif Habib Limited Economist Sana Tawfiq, while noting that inflation reached record levels, stated that on a month-on-month (MoM) basis “inflation clocked-in higher, up 1.6%”. 

The analyst told Geo.tv that the MoM jump was primarily due to high food prices, household items and clothing. 

She added that core inflation continues to rise and crossed 23% YoY during the outgoing month.  

“We expect headline numbers to recede from June onwards with base-effect kicking in. However, domestic food and energy prices as well as further currency devaluation remain key risks to the overall inflation,” Tawfiq warned. 

The latest 38% rise tops that of Sri Lanka, which posted annual inflation of 25.2% in May.

Inflation has been on an upward trend since early this year after the government took painful measures as part of fiscal adjustments demanded by the International Monetary Fund (IMF) to unlock stalled funding, which still has not been disbursed.

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An investigation was “launched” into PTA’s inability to get Rs. 78 billion back from Telcos

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The PTA has reportedly been instructed to reply to NAB by July 29. According to the enquiry, the national exchequer has suffered losses as a result of the delay in collecting dues.

The PTA has been asked to provide NAB with information about any pertinent records, court proceedings, and overdue bills. The NAB Karachi has summoned the PTA officials to appear with all pertinent documentation.

All of the principle sum has to be paid by the LDI firms, according to sources. But due to judicial stay orders, the collection of dues has been impeded.

These sources further state that a steering group has been established by the Ministry of IT to supervise the issue of dues recovery.

In a previous event, the tariffs levied on importing cell phones from outside were clarified by the Pakistan Telecommunication Authority (PTA).

Contrary to what some internet reports claim, PTA clarified in response to recent news regarding the tariffs on mobile phone imports that there hasn’t been a formal decision to remove these levies in Pakistan.

the PTA.Pakistanis living abroad will be the only ones free from these levies, according to the PTA. A SIM card can be inserted and the phone restarted to temporarily register a device for non-PTA mobile subscribers.

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Weekly inflation in Pakistan increased by 0.17 percent.

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The SPI for the week under review in the aforementioned group was reported at 321.95 points, as opposed to 321.40 points during the previous week, according to the PBS statistics.

The SPI for the combined consumption group saw a 20.09 percent increase in the week under review compared to the same week the previous year.

The weekly SPI includes 51 necessary items for every spending group and 17 urban areas, with a base year of 2015–16 = 100.

The SPI for the lowest consumption category, which is up to Rs 17,732, grew by 0.08 percent from 311.97 points to 312.22 points this past week.

0.18 percent,The index of consumption for the lowest consumption groups, which are Rs 17,732-22,888, Rs 22,889-29,517, Rs 29,518-44,175 and above Rs 44,175; increased by 0.13 percent, 0.15 percent, 0.18 and 0.19 percent, respectively.

Nineteen (37.25%) of the fifty-one commodities had price increases over the week, eight (15.69%) had price decreases, and twenty-four (47.06%) had unchanged pricing.

On a weekly basis, the following commodities saw significant price decreases: tomatoes (9.19%), onions (2.14%), LPG (1.04%), bananas (0.53%), wheat flour (0.35%), potatoes (0.17%), pulse masoor (0.16%), and bread (0.05%).

Chicken (4.80%), garlic (2.01%), pulse gramme (1.87%), eggs (1.71%), beef (0.93%), gur (0.89%), pulse moong (0.84%), fresh milk (0.45%), firewood (0.23%), and cigarettes (0.12%) were among the items whose average prices increased significantly week over week.

The commodities that saw a year-over-year decline were: wheat flour (31.75%); cooking oil (13.44%); vegetable ghee 2.5 kg (10.42%); vegetable ghee 1 kg (9.85%); mustard oil (8.33%); eggs (5.82%); rice basmati broken (4.15%); and tea package (2.52%).

Gas prices for Q1 (570.00%), onions (96.01%), pulse gramme (40.39%), powered milk (39.11%), garlic (34.61%), pulse moong (29.77%), men’s sandals (25.01%), beef (23.52%), salt powder (23.28%), pulse mash (22.50%), and energy saver (17.96%) were among the commodities whose average prices increased year over year.

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The price of gold has drastically dropped in Pakistan.

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As per the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the cost of 24-karat gold per tola decreased by Rs 2,300, standing at Rs 250,500.

A kilogramme of 24-karat gold costing Rs1,972 less at the local market, making it worth Rs2114,763. Ten grammes of 22-karat gold had a price decrease to Rs196,866 as well.

After losing a significant $43 during the day, the rate per ounce of gold on the international market also decreased. It currently stands at $2,370.

On Thursday, the price of 24-karat silver also experienced a decline, falling by Rs60 to settle at Rs2,860 petal.

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