Inflation rises to 11.5pc in November, highest in 21 months

Govt had set the target of keeping inflation under 8pc in the current fiscal year

ISLAMABAD: Inflation during November has registered the highest rise in 21 months with an 11.5 per cent jump on a year-on-year (YoY) basis compared with an increase of 9.2pc in the previous month and 8.3pc in November 2020.

According to the Monthly Review on Price Indices released by the Ministry of Planning, Development & Special Initiatives and Pakistan Bureau of Statistics (PBS) on Tuesday.

The report shows that country’s consumer inflation accelerated at a fast pace in November due to rising food and energy prices as the Consumer Price Index (CPI) had last peaked in  February 2020 after clocking in at 12.40pc.  

The Ministry of Finance has also admitted that rising inflation and external sector pressure were major challenges the incumbent government was facing following an acceleration of worldwide inflation.

“External pressures have begun to materialise mostly due to the compound impacts of increased economic activity, an expansionary macroeconomic policy mix, and rising international commodity prices”, said Economic Adviser’s Wing (EAW) of the Ministry of Finance in its Monthly Economic Update & Outlook released on Monday.

Earlier in November, the State Bank of Pakistan (SBP) lifted the interest rate by 150 basis points, in part due to surging prices. The interest rate now stands at 8.75pc, the highest level since April 2020.

As per economists, although increased consumer demand was the reason for higher commodity prices, imported inflation included high energy and other commodity prices played a big role in putting pressure on the economy.

The data shows that CPI took a leap of 3pc in a span of one month. It was also the fastest inflation rate since last May when the CPI was recorded at 10.9pc whereas the five-month (5MFY22) inflation was recorded at 9.3pc compared to 8.8 percent in the same period of last year.

The government had set the target of keeping inflation under 8pc in the current fiscal year.

While excluding the food and energy components, the core CPI also increased for urban and rural areas. As per the data, urban core inflation was 7.6pc YoY in November 2021 and rural 8.2pc against October’s reading of 6.7pc for both urban and rural areas.

The data shows that the prices of food and non-food items including egg, cooking oil and ghee, wheat, wheat flour, vegetables, pulses, electricity, and petroleum products witnessed a significant increase during the period under review.

On month-on-month (MoM) basis, the CPI increased by 3pc in November 2021 as compared to an increase of 1.9pc in the previous month. On a YoY basis, the CPI for November 2021 increased by 11.53pc compared to the corresponding month of the last year i.e. November 2020.

The CPI inflation urban increased by 12pc on a YoY basis in November 2021 as compared to an increase of 9.6pc in the previous month and 7pc in November 2020. On a MoM basis, it increased by 2.9pc in November 2021 as compared to an increase of 1.7pc in the previous month and an increase of 0.6pc in November 2020.

The CPI inflation rural increased by 10.9pc YoY in November 2021 as compared to an increase of 8.7pc in the previous month and 10.5pc in November 2020.

On a MoM basis, it increased by 3.1pc in November 2021 as compared to an increase of 2.2pc in the previous month and an increase of 1.1pc in November 2020.

Furthermore, the Sensitive Price Index (SPI) inflation on a YoY basis increased by 18.1pc in November 2021 as compared to an increase of 15.2 percent a month earlier and an increase of 9.9 percent in November 2020. On a MoM basis, it increased by 3.6pc in November 2021 as compared to an increase of 2.1pc a month earlier and an increase of 1.1pc in November 2020.

Moreover, registering a major jump, the Wholesale Price Index (WPI) inflation on a YoY basis increased by 27pc in November 2021 as compared to an increase of 21.2pc a month earlier and an increase of 5pc in November 2020.

WPI inflation on a MoM basis increased by 3.8pc in November 2021 as compared to an increase of 4.2pc a month earlier and a decrease of 0.9pc in corresponding month i.e. November 2020.

 

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]

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