CPI Preview: Inflation to fall to 7.5% in Sep

September 20, 2024 (MLN): Pakistan's inflation is expected to fall further to 7.5% over the prior year in September, a deceleration compared to August's 9.6% annual gain in prices and the lowest annual rate since January 2021.

Monthly inflation is projected to remain largely unchanged as a fall in transport and food costs offset electricity price gains.

Notably, transport inflation is expected to fall a significant 6.6% from a year ago as fuel costs ease amid a plunge in global prices.

Food prices are anticipated to fall 0.4% compared to last month, taking the annual increase to just 0.4%. Chicken and wheat prices have likely decreased amid smooth supplies.

Housing inflation will continue to remain the most disappointing aspect of September's inflation with an annual increase of 22.5%. On a monthly basis, the index has likely jumped 0.8% due to a rise in electricity and gas charges.

From October, these costs will further surge as the government has raised energy prices to meet the International Monetary Fund’s conditions for a new loan. Prime Minister Shehbaz Sharif had provided relief for three months until October to pause the increase in electricity prices.

It is also the largest contributor to the overall advance in the CPI, with more than half of the inflation advance being driven by this.

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