Connect with us

Business

CPI inflation surges faster than expected in October to 26.6%

Published

2 years ago

on

  • CPI inflation up 4.7% compared to fall of 1.2% in Sept 2022.
  • Numbers mostly in line with the market expectations.
  • Impact of the high-base effect to kick in down the line.

ISLAMABAD: Accelerating faster than anticipated, Consumer Price Index (CPI)-based inflation for October 2022 surged to 26.6% year-on-year,  latest data showed, chiefly fueled by high-priced food and a hawkish monetary outlook. 

According to the Pakistan Bureau of Statistics (PBS), consumer prices rose 4.7% compared to a fall of 1.2% in September 2022 month-on-month. 

The inflation is not far from a 47-year high.

The inflation crossed 20% in June 2022, topping the 47-year high of 27.3% in August 2022 year-on-year.

PBS in a statement said the rise in consumer prices in October from last month was boosted mainly by electricity and food prices, while the higher CPI from October last year was caused by rising costs of food and fuel.

The numbers are in line with the market expectations.

The market was mostly bracing for the headline inflation to increase by 4% month-on-month. 

Moreover, food inflation swelled 36.2% year-on-year, while transport prices sped up 53.4%, clothing and footwear prices rose 18.3% and housing, water and electricity costs rose 11.9%.

Brokerage Ismail Iqbal Securities had projected the inflation to clock in at 25.7% as against 23.2% in September. “Overall, we expect FY23 average inflation at 22%. The sequential increase will be led by normalisation of electricity tariff, quarterly house rent revision, and higher perishable food prices,” the brokerage said in a report. 

“The impact would be diluted to some extent by a reduction in petroleum prices,” it added.

However, analysts see the impact of the high-base effect in December, while the announcement of a number of subsidies on several items amid cooling international commodity markets might reduce inflation pressure to around 22-23% in November.

The CPI inflation in urban areas was registered at 24.6% year-on-year in the month under review as against an increase of 21.2% in September 2022 and 9.6% in October 2021.

It rose to 4.5% in October 2022 month-on-month compared to a fall of 2.1% in the previous month and an uptick of 1.7% in October last.

In rural areas, CPI inflation touched 29.5% year-on-year in the outgoing month vis-à-vis an increase of 26.1% in the previous month and 8.7% in October 2021.

It, month-on-month, increased to 5.0% in October 2022 as compared to an increase of 0.2% in the previous month and an increase of 2.2% in October last year.

Increasing inflationary pressures remain a major threat to the economy amid eroding foreign exchange reserves.

State Bank of Pakistan (SBP) in its Monetary Policy Committee (MPC) meeting held the interest rate unchanged, citing that the prevailing stance sustains just the right balance between managing inflation and maintaining the growth rate post-floods.

“On the one hand, inflation could be higher and more persistent due to the supply shock to food prices, and it is important to ensure that this additional impetus does not spill over into broader prices in the economy. On the other, growth prospects have weakened, which should reduce demand-side pressures and suppress underlying inflation,” MPC had said.

According to CPI numbers, inflation increased the sharpest in transport, food, housing, and restaurant and hotel groups in the outgoing month.

Persistently high inflation has severely strained the economy which is also under pressure from falling foreign exchange reserves, the rupee rout, and a yawning current account deficit.

SBP-held foreign exchange reserves stand at $7.4 billion, hardly enough to cover one month’s imports.

Devastating floods in August claimed more than 1,700 lives, while multiplying the economic problems by wiping out crops and infrastructure.

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Trade Agreements Worth $10.70 Million Were Signed At Expo For Pakistan And Indonesia To Increase Their Trade With The Support Of SIFC

Published

20 hours ago

on

By

Through the assistance of the Special Investment Facilitation Council (SIFC), Pakistan and Indonesia have reiterated their dedication to improving their economic and commercial ties.

The participation of a Pakistani trade delegation was made possible by Indonesia at a recent trade expo, which resulted in the formation of agreements and memorandums of understanding with a total value of 10.70 million $. In addition to retail items and automobile components, these agreements span industries such as coconut, cocoa, ginger, spices, and retail goods.

As a key step toward improving economic ties, particularly with the Sindh business community, the participation of the group was praised by Tegu Viveko, who is acting as the Consul General of Indonesia.

Abid Nisar, the head of the Pakistan-Indonesia business council, has stated his confidence regarding the possibility of enhanced relations between the two countries, highlighting the historical and cultural origins of the connection.

In its capacity as a member of the G20, Indonesia intends to assist both nations in maximizing the benefits of their partnership in order to achieve better economic stability.

Continue Reading

Business

Pakistan’s textile exports rose by 9.51% to $4.520 billion.

Published

4 days ago

on

By

Pakistan’s textile exports had a 9.51 percent increase in the first quarter of the current financial year (2024-25) compared to the same quarter of the previous year.

The Pakistan Bureau of Statistics (PBS) reported that textile exports from the country amounted to US $4.520 billion during July-September (2024-25), compared to US $4.127 billion during the same period in the previous year (2023-24).

The textile goods that facilitated trade expansion comprised cotton fabric, whose exports rose by 10.20 percent to $523.63 million from $475.187 million, and knitwear, which experienced a 14.13 percent increase in exports to $1,268.908 million from $1,111.818 million.

Other commodities that experienced trade growth included bed wear, with exports increasing by 13.31 percent to $794.972 million from $701.570 million; towels, which rose by 7.04 percent to $261.316 million from $244.134 million; and tents, canvas, and tarpaulin, which grew by 5.43 percent to $28.796 million this year compared to $27.312 million last year.

The export of readymade garments increased by 23.17 percent to $996.831 million from $809.316 million; art, silk, and synthetic textiles rose by 15.79 percent to $96.482 million; made-up articles (excluding towels and bed wear) grew by 12.10 percent to $191.050 million from $170.422 million; and the export of other textile materials surged by 8.73 percent to $187.145 million from $172.112 million.

The textile commodities that had negative trade growth were cotton yarn, with exports decreasing by 48.45 percent, from $315.404 million to $162.579 million, while raw cotton exports fell by 100 percent from 6.621 million to zero during the reviewed months.

The export of yarn, excluding cotton yarn, decreased by 15.15 percent, from $10.096 million to $8.566 million.

In September 2024, textile exports experienced a year-on-year growth of 17.92 percent compared to the same month in the previous year.

Textile exports from the country in September 2024 amounted to US $1,604.481 million, compared to US $1,360.902 million in September 2023.

Textile exports from the country experienced a nominal decline of 2.40 percent in September 2024, compared to the $1,644.333 million reported in August 2024, according to PBS statistics.

Continue Reading

Business

PIA is designated as the official airline of IDEAS 2004.

Published

4 days ago

on

By

PIA has been designated as the official airline of IDEAS 2024. The PIA will utilise its aircraft for the promotion of IDEAS 2024.

In this context, the emblems of IDEAS 2024 have been affixed to two Boeing 777 aircraft and two Airbus planes of Pakistan International Airlines.

The International Defence Exhibition and Seminar (IDEAS) 2024 is scheduled to commence from November 19 to 22 at the Karachi Expo Centre.

The government of Pakistan places significant value on IDEAS. The show draws several delegates and is perceived as a means to promote their local arms trade.

The inaugural IDEAS launch took place in 2000, serving as a platform to promote Pakistan’s indigenous arms manufacturing industry while allowing international suppliers to provide solutions for the needs of Pakistan’s tri-services.

The event, consistently held at the Karachi Expo Centre, attracted forty-five foreign delegations in its inaugural year.

Continue Reading

Trending