Pakistan’s annual consumer price inflation rate eased to 9.6% in August, marking the first time in nearly three years that it has dropped to a single-digit figure, according to the Pakistan Bureau of Statistics (PBS) on Monday.
The Consumer Price Index (CPI) decreased further to 9.6% year-on-year in August, down from 11.1% in July.
The country has been grappling with inflation rates exceeding 20% since May 2022, with a peak of 38% last May. This surge in inflation coincided with the implementation of reforms under a critical International Monetary Fund (IMF) bailout program.
On the previous day, Prime Minister Shehbaz Sharif expressed satisfaction with the “sharp decline in inflation” and the improvement in the country’s credit ratings by international agencies like Fitch and Moody’s.
The prime minister’s comments followed the Ministry of Finance’s monthly outlook report, which projected that inflation would stay within the range of 9.5% to 10.5% in August and could further decline to between 9% and 10% in September.
Moody’s Ratings recently upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings from Caa3 to Caa2, citing improved macroeconomic conditions.
According to the PBS, “CPI general inflation rose to 9.6% year-on-year in August 2024, compared to an increase of 11.1% in the previous month and 27.4% in August 2023.”
On a month-to-month basis, inflation increased by 0.4% in August 2024, compared to a rise of 2.1% in July and 1.7% in August 2023.
Data reveals that CPI inflation in urban areas increased to 11.7% year-on-year, down from 13.2% in July, and 25.0% in August 2023. On a month-to-month basis, it grew by 0.3%, compared to a 2.0% increase in July and 1.6% in August 2023.
In rural areas, CPI inflation rose to 6.7% year-on-year in August 2024, up from 8.1% in July but significantly lower than the 30.9% recorded in August 2023. On a month-to-month basis, it increased by 0.6% in August 2024, compared to 2.2% in the previous month and 1.9% in August 2023.
Meanwhile, the Sensitive Price Indicator (SPI) inflation rose by 10.8% year-on-year in August 2024, compared to 15.7% the previous month and 27.9% in August 2023. On a month-to-month basis, it decreased by 0.3% in August 2024, compared to a 2.0% increase in the previous month and a 4.1% rise in August 2023.
Month-to-month increases in food prices included onions (22.84%), chicken (13.62%), eggs (12.39%), fresh vegetables (12.25%), besan (4.88%), pulse gram (4.55%), gram whole (3.82%), potatoes (2.90%), pulse moong (2.83%), fresh milk (1.27%), milk products (1.20%), and vegetable ghee (1.10%).
Non-food items that saw price increases included motor vehicle tax (168.79%), stationery (5.08%), medicines (1.35%), readymade garments (1.24%), plastic products (1.03%), and doctor (MBBS) clinic fees (0.88%).
Year-on-year, the most significant price increases were seen in onions (136.32%), fresh vegetables (76.35%), pulse gram (42.35%), besan (31.15%), fish (28.98%), fresh fruits (27.32%), pulse moong (25.05%), milk powder (24.17%), beans (23.35%), dry fruits (21.10%), and meat (19.04%).
Non-food items that saw the most significant year-on-year price increases included gas charges (318.74%), motor vehicle tax (168.79%), dental services (28.84%), cotton cloth (24.17%), woolen readymade garments (23.31%), and transport services (22.87%).
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