Pakistan’s CPI surges by 3.8% in February 2018

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KARACHI: The country’s Consumer Price Index (CPI) which measures average change over time in the prices for a market basket of consumer goods and services, surged by 3.8 per cent on year-on-year (YoY) basis in February 2018 as compared to an increase of 4.4 per cent in the previous month and 4.2 per cent in February 2017.

On month-on-month basis, it remained low in February 2018 as compared to an increase of 0.0 per cent in the previous month and increase of 0.3 per cent in February 2017.

Economic analysts have forecasted that CPI inflation would decline owing to the reduction in food inflation on the back of a correction in prices of chicken, excess supply of onion and tomato crops, and revision in petroleum and drugs prices.  The government has once again increased the prices of petroleum products all over the country for March 2018.

The impact of currency devaluation is yet to occur, increasing inflationary pressure from food prices usually seen in the last quarter of the fiscal year. Hence, the analyst forecasts for FY18/CY18 inflation around 4.5 to 5.0% / 5.2 to 5.7%, foreseeing 75-100 bps rate hike during the remainder of CY18.

Further, the trend of international oil prices (having corrected 6 per cent after touching a high of $70.5/bbl) is likely to play a major part on future interest rate hikes, he added.

Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 5.2 per cent on (YoY) basis in February 2018 as compared to an increase of 5.2 per cent in the previous month and 5.3 per cent in February 2017.

On (MoM) basis, it increased by 0.2 per cent in February 2018 as compared to an increase of 0.8 per cent in the previous month, and an increase of 0.2 per cent in the corresponding month last year i.e. February 2017.

Core inflation, measured by 20 per cent weighted trimmed mean CPI (Core Trimmed) increased by 4.3 per cent on (YoY) basis in February 2018 as compared to 4.6 per cent in the previous month and by 4.1 per cent in February 2017. On (MoM) basis, it increased by 0.1 per cent in February 2018 as compared to an increase of 0.6 per cent in the previous month and an increase of 0.2% in the corresponding month last year i.e. February 2017.

SPI inflation on YoY increased by 0.5 per cent in February 2018 as compared to an increase of 2.0 per cent a month earlier and an increase of 1.1 per cent in February 2017. On MoM basis, it decreased by 1.2 per cent in February 2018 as compared to a decrease of 1.0 per cent a month earlier and an increase of 0.2 per cent in February 2017.

WPI inflation on YoY basis increased by 4.1 per cent in February 2018 as compared to an increase of 4.7 per cent a month earlier and an increase of 5.3 per cent in February 2017. WPI inflation on MoM basis decreased by 0.1 per cent in February 2018 as compared to an increase of 1.8 per cent a month earlier and an increase of 0.5 per cent in the corresponding month last year i.e. February 2017.

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