KARACHI
The average inflation, Consumer Price Index (CPI) hiked by 4.16 per cent on year-on-year (YoY) basis in July-June 2016-17 as compared to an increase of 2.86 per cent in the previous year, the data of Pakistan Bureau of Statistic said here on Monday.
CPI inflation increased by 3.9 per cent on YoY basis in June 2017 as compared to an increase of 5.0 per cent in the previous month and 3.2 per cent in June 2016. On a month-on-month basis, it decreased by 0.4 per cent in June 2017 as compared to an increase of 0.0 per cent in the previous month and an increase of 0.6 per cent in June 2016.
The analysts of different brokerage houses were expecting that full year average CPI would clock at 4.24 per cent in 2016-17, in line with their initial forecast of 4.20 per cent YoY (for 2016-17). The inflation remained under control because of petroleum prices, which the finance ministry cut four times in the last fiscal year (2016-17).
An analyst said he expects CPI (consumer price index) for the month of June 2017 to clock in at 4.86 per cent YoY (vs. 5.02pc YoY in May’17), but it is below target.
On the other hand, no change in housing index this month and a slight cut in fuel prices (MOGAS Rs 1.20/litre & HSD Rs 1.6/litre) helped to ease the CPI.
The analyst maintained that policy rate may increase by 50 basis points to 6.25 per cent in September 2017.
However, the central bank can maintain the same policy rate till December 2017 in order to spur large scale manufacturing (LSM) growth as currently it stands at higher side in eleven-month of 2016-17.
The year-on-year increase in inflation for house rent supported the CPI inflation in last fiscal year. One reason for increasing house rent was the high cost of land and housing units as the need for homes grows every year. The gap between the demand and availability of housing units has already crossed eight million, the analyst said.
“This time the ministry of finance again decreased the petroleum prices for July 2017 and the decision of government would support the core inflation in next month (July 2017),” another analyst said.
The data said that core inflation measured by non-food non-energy CPI (Core NFNE) increased by 5.5 per cent on (YoY) basis in June 2017 as compared to increase of 5.5 per cent in the previous month and 4.6 per cent in June 2016. On (MoM) basis, it increased by 0.1 per cent in June 2017 as compared to increase of 0.2 per cent in previous month, and an increase of 0.1 per cent in corresponding month of last June 2016.
Core inflation, measured by 20 per cent weighted trimmed mean CPI (Core Trimmed) increased by 4.2 per cent on (YoY) basis in June 2017 as compared to 4.8 per cent in the previous month and by 3.7 per cent in June 2016. On (MoM) basis, it increased by 0.0 per cent in June 2017 as compared to an increase of 0.2 per cent in the previous month and an increase of 0.2 per cent in corresponding month of last year 2016.
Sensitive Price Index (SPI) inflation on YoY increased by 1.4 per cent in June 2017 as compared to an increase of 2.4 per cent a month earlier and an increase of 0.7 per cent in June 2016. On MoM basis, it increased by 0.1 per cent in June 2017 as compared to a decrease of 0.9 per cent a month earlier and an increase of 1.1 per cent in June 2016.
Wholesale Price Index (WPI) inflation on YoY basis increased by 3.3 per cent in June 2017 as compared to an increase of 5.2 per cent a month earlier and an increase of 0.2 per cent in June 2016. WPI inflation on MoM basis decreased by 0.5 per cent in June 2017 as compared to a decrease of 0.2 per cent a month earlier and an increase of 1.4 per cent in corresponding month of last year i.e. June 2016.
