CPI growth loses pace as month on month food inflation declines

December 05, 2018 (MLN): General Consumer Price Index (CPI) Inflation in November 2018 have increased by 6.5% on a year on year basis, while the increment recorded last month stood at 6.8% and that recorded last year stood at 4%.

On a month-on-month basis, it increased by 0.1% in November 2018 as compared to an increase of 2.3% in October 2018 and 0.4% in November 2017.

Evidently, CPI growth missed a step based on month-on-month comparison, due to the 0.6% MoM decline in CPI for Food group. Carrying a weightage of approximately 35% in the CPI basket, the MoM impact of Food group’s CPI variation is the largest amongst all groups, on general CPI, that of 0.22%.

As per official data released by Pakistan Bureau of Statistics (PBS), the 9.11% YoY increase in CPI for utilities, has had the largest impact of 2.44%, on general CPI, over November 2017. The weightage for this group is 29.41%, in the CPI basket.

The top commodities whose CPI varied from previous month include, Chicken (+14.78%), Eggs (+10.20%), Potatoes (+6.99%), Fish (4.03%), Pulse Mash (3.60%), Pulse Moong (+2%), Dry Fruits (+1.73%), Woolen Readymade Garments (+4.69%), Motor Fuel (+4.09%), Motor Vehicles (+2.18) and Construction Wages (+1.8%), among others.

Similarly, on a year-on-year basis, the top commodities whose CPI varied include, Chicken (+44.46%), Spices (+13.95%), Meat (+12.69%), Cigarettes (+12.26%), Dry Fruits (+10.45%), Tea (+9.35%), Rice (+9.28%), Tomatoes (-61.3%), Onion (-58.1%), Potatoes (-20.26%), Gas (+85.31%), Kerosene Oil (+28.81%), Motor Fuel (+28.73%) and Education (10.01%), among others.

On the other hand, Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 8.3% on (YoY) basis in November 2018 whereas on (MoM) basis, it increased by 0.4% in November 2018 as compared to an increase of 1.1% in previous month, and an increase of 0.3% in corresponding month of last year i.e. November 2017.

Meanwhile, Core inflation, measured by 20% weighted trimmed mean CPI (Core Trimmed) increased by 6.7% on (YoY) basis in November 2018, and by 0.3% on (MoM) basis.

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