Business

CPI inflation surges faster than expected in October to 26.6%

Published

2 years ago

Farwa

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.

Business

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

Published

23 hours ago

Farwa

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.

Business

Weekly inflation in Pakistan increased by 0.17 percent.

Published

23 hours ago

Farwa

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.

Business

The price of gold has drastically dropped in Pakistan.

Published

2 days ago

Farwa

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.