September 02, 2024 (MLN): Pakistan inflation fell to 9.6% in August compared to 11.1% in the last month and 27.4% in August 2023, the latest data issued by the Pakistan Bureau of Statistics (PBS) on Monday showed.
The annual rise in the consumer price index (CPI) was in line with the market expectations of 9.6%, and is the first single-digit inflation since October 2021, when it was 9.2%.
Accordingly, this takes the average yearly inflation of 2MFY25 to 10.4% compared to 27.8% in 2MFY24.
On a monthly basis, CPI rose 0.4% in August 2024 as compared to an increase of 2.1% in the previous month and an increase of 1.7% in August 2023.
The average core inflation, measured by non-food non-energy, rose 11.9% YoY in August 2024 as compared to an increase of 13.8% YoY in the previous month and an increase of 21.4% YoY in August 2023.
On a monthly basis, average core CPI increased 0.5% in August 2024 as compared to an increase of 0.9% in the previous month and an increase of 2.2% in August 2023.
The inflation pace slowed in August amid a fall in electricity charges compared to last month.
The decline came from FCA adjustment and the recent Rs50 billion relief package announced by Prime Minister Shehbaz Sharif for domestic electricity consumers using up to 200 units per month for three months until October.
Overall housing and energy costs fell 1.4% from last month. However, costs soared 22.2% from a year ago.
Food costs rose slightly by 2.5% while transport prices jumped 3.2% from last year.
| Metric | Aug-24 | Jul-24 | Aug-23 | 2MFY25 | 2MFY24 |
|---|---|---|---|---|---|
| CPI MoM | 0.4% | 2.1% | 1.7% | 1.2% | 2.6% |
| CPI YoY | 9.6% | 11.1% | 27.4% | 10.4% | 27.8% |
| Core CPI MoM | 0.5% | 0.9% | 2.2% | 0.7% | 1.7% |
| Core CPI YoY | 11.9% | 13.8% | 21.4% | 12.8% | 21.1% |
With the CPI-based inflation rate at 9.6% and the policy rate at 19.5%, the real interest now stands at 9.9%.
The State Bank of Pakistan (SBP) has slashed interest rates by a cumulative 250 basis points in the last two meetings and is scheduled to meet again on September 12.
The significant slowdown in price gains will give policymakers additional room to continue monetary easing in a bid to spur growth.
Copyright Mettis Link News
Posted on: 2024-09-02T15:08:56+05:00
