CPI Preview: Inflation to climb above 12% YoY in June

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Abdur Rahman | June 28, 2024 at 04:53 PM GMT+05:00

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June 28, 2024 (MLN): Headline inflation is expected to inch slightly higher to around 12.3% YoY in June 2024.

After two consecutive monthly declines, MoM inflation is projected to rise by 0.25%. That compares with the last 12-month average increase of 0.95% MoM.

Accordingly, this will take the average yearly inflation of fiscal year 2023-24 to 23.4% YoY compared to last year's average inflation of 29.2%.

National Consumer Price Index 
  June 2024E Indices
  Weight YoY MoM Jun-2024 May-2024 Jun-2023
Headline CPI 100% 12.34% 0.25% 255.42 254.78 227.37
Food & Non-alcoholic Bev. 34.58% 0.96% 0.11% 264.30 264.01 261.78
Alcoholic Bev.& Tobacco 1.02% 4.71% 1.88% 373.56 366.68 356.77
Clothing & Footwear 8.60% 17.07% 0.30% 240.19 239.46 205.16
Housing, Water, Electricity, Gas & Fuels 23.63% 35.08% 1.33% 239.77 236.63 177.51
Furnishing & Household Equipment Maintenance 4.10% 12.03% 0.05% 267.54 267.41 238.81
Health 2.79% 19.65% 1.26% 244.21 241.17 204.10
Transport 5.91% 8.22% -4.09% 302.18 315.06 279.24
Communication 2.21% 13.51% 0.03% 134.31 134.27 118.33
Recreation & Culture 1.59% 7.18% -0.04% 262.17 262.27 244.60
Education 3.79% 15.53% 0.01% 199.02 199.00 172.26
Restaurants & Hotels 6.92% 12.86% 0.62% 268.87 267.22 238.22
Miscellaneous 4.87% 13.91% 0.35% 283.78 282.79 249.12

 

The Food index is projected to inch up by 11 basis points (bps) on a monthly basis.

Major changes include a decline in the prices of wheat, rice, bread, and garlic. However, this fall is offset by a significant surge in the price of tomatoes, which has increased by over 65%.

Meanwhile, Transport index is anticipated to decrease significantly by 4.1% amid deflated fuel prices.

The Housing Index is projected to rise 1.33% due to a rise in electricity charges, primarily attributable to the FCA adjustment in electricity costs.

Inflation Sensitivity

If consumer prices rise an average 0.5% a month going forward, annual inflation will drop to about 3.4% by end-December 2024.

With a 0.95% monthly increase, which is the last 1-year average, annual inflation will fall to about 6.6% by December.

Meanwhile, with an average monthly increase of 1.84%, which is the last 2-year average, annual inflation will stand at 13.4% by December.

The following chart maps out the yearly inflation trajectory based on monthly inflation rates of 0.5%, 0.95%, and the last 2-year average of 1.84%

Copyright Mettis Link News

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