August 30, 2019 (MLN): Pakistan Bureau of Statistics is scheduled to disclose the Consumer Price Index (CPI) for the month of August on Monday i.e. September 2, 2019.
Anticipating these results, several brokerage houses have put forth their projections for the CPI figures, based on previous performance and current economic factors. The projections of these research houses are listed below;
|
Inflation Forecast for the month of August, 2019 |
||
|---|---|---|
|
Research House |
YOY |
MOM |
|
AKD Research |
11.67% |
1.41% |
|
Arif Habib Limited |
11.28% |
1.06% |
|
Al Habib Capital Markets |
11.42% |
1.19% |
|
Ismail Iqbal Securities |
11.50% |
1.30% |
|
Insight Securities |
11.60% |
1.40% |
|
Darson Securities |
11.60% |
1.40% |
|
Spectrum |
11.39% |
1.16% |
|
Abbasi & Co. |
11.92% |
1.64% |
|
Shajar Capital |
11.59% |
1.35% |
| Foundation Securities | 11.60% | 1.30% |
|
Sherman |
11.50% |
1.30% |
|
Average |
11.55% |
1.32% |
|
Consensus |
11.60% |
1.30% |
It can be easily inferred from the figures provided above that the market is expecting CPI figure to land within the range of 11.2% to 11.9% in the month of August, as compared to 10.34% recorded in July, 2019 and 5.85% in August, 2018. If this prophecy becomes a reality, the country shall witness the highest level of inflation since May, 2012.
Pursuant to the justifications provided by these research houses, the inflation is expected to rise on the back of sharp increase in food index by 2.8%, MoM, especially during the time of Eid-ul-Azha. The cause for expected rise in inflation can also be accorded to hike in fuel prices by 4.5% due to changes in international prices.
In a similar fashion, the core inflation, i.e. non-food-non-energy, is likely to rise during the said month owing to increase in the prices of cotton cloth, house rent, transportation services and communication apparatus.
Going forward, the inflation is expected to hit an all-time high in FY2020 on account of higher fuel prices, food prices, surge in taxes, further adjustment in power tariffs, depreciation of local currency and increase in international prices of energy.
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