ISLAMABAD – The continuous increase in prices of petroleum products and sharp rupee depreciation pushed the inflation to the highest level of 5.2 percent during June over a year ago.
Inflation measured by Consumer Price Index (CPI) has recorded at 5.2 percent during June over a year ago, according to Pakistan Bureau of Statistics (PBS). Inflation has gone to highest level in last couple of years as prices of oil are increasing and rupee has depreciated.
Pakistani currency is under severe pressure currently as US dollar has recently surged to historic Rs125. Similarly, the caretaker government has increased the oil prices twice in last twenty days. The government has so far made a cumulative increase of Rs11.80 per litre in petrol price, Rs20.55 in diesel and Rs7.82 per litre in kerosene oil price.
However, the government has contained the inflation at below the target of 6 percent during last fiscal year. The CPI-based inflation has recorded at 3.92 percent during previous financial year (July-June). The State Bank of Pakistan had already projected the average inflation for FY18 to remain within SBP’s model-based range of 3.5-4.5 percent.
The government has set inflation target at 6 percent for t he ongoing fiscal year 2018-19. Inflation would increase as the government is raising the prices of oil prices. The increase in the petroleum prices is caused due to increase in petroleum prices in international market and depreciation of Pak Rupee against USD.
According to the PBS, on month-on-month basis, inflation increased by 0.5 percent in June 2018 as compared to a decrease of 0.4 percent in the previous month. Meanwhile, core inflation measured by non-food non-energy CPI (Core NFNE) increased by 7.1 percent on annual basis in June 2018 as compared to an increase of 7 percent in the previous month and 5.5 percent in June 2017.
The Sensitive Price Indicator (SPI), which gauges rates of kitchen items on weekly basis, increased by 0.88 percent. Similarly, the Wholesale Price Index (WPI) based inflation enhanced by 3.47 percent in the period under review.
The break-up of inflation of 5.21 percent showed that food and non-alcoholic beverages prices increased by 3.23 percent. Similarly, health and education charges went up by 5.5 percent and 13.09 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 5.55 percent in last the month.
Meanwhile, the prices of alcoholic beverages and tobacco went down by around 3.07 percent. Price of clothing and footwear increased by 6.51 percent and furnishing and household equipment maintenance charges 6.04 percent.
Recreational charges and those related to culture went up by 6.23 percent in the period under review, while amounts charged by restaurants and hotels by 5.45 percent in June 2018 as compared to the same month last year.
In food commodities, price of tomatoes increased by 41.66 percent, potatoes prices enhanced by 6.78 percent and onion price went up by 6.18 percent during June as compared to the month of May. In non-food commodities, charges of transport services increased by 4.02 percent, motor fuel 3.29 percent, footwear price enhanced by 1.31 percent and charges of mechanical service increased by 0.94 percent and construction wage rates also recorded minor increase.
According to the PBS figures, price of betel, leaves and nuts decreased by 7.68 percent, eggs 3.74 percent, besan2.78 percent, pulse mash 1.66 percent and other pulses prices also recorded decline during June over May.