Wednesday, August 10, 2022
HomeEconomyInflation hits 14-year high of 24.9% YoY in July

Inflation hits 14-year high of 24.9% YoY in July

August 01, 2022 (MLN): Pakistan's yearly inflation rate (New Base 2015-16) in July 2022 jumped to a 14-year high of 24.9% compared to 21.3% in June 2022 and 8.4% in July 2021, according to the latest data released by Pakistan Bureau of Statistics (PBS) today.

July’s reading was above the market expectations which were between 22% and 25.2% with an average estimate of 23.34%.

On a month-on-month basis, it rose by 4.35% in July 2022 as compared to an increase of 6.3% in the previous month and an increase of 1.3% in July 2021. This sequential increase was driven by the housing group and transport index that surged to 8.82% and 5.66%, MoM, thanks to quarterly rent adjustments, a spike in energy tariffs, and revision in various transport fares.

In broad inflation, the food basket witnessed a 4.05% MoM due to a jump in the prices of vegetables, pulses, eggs, tea and rice.

On the yearly basis, the increase in CPI was led by the increase in transport, food, restaurants & hotels, beverages and housing index by around 64.7%, 28.8%, 25%, 22.5% and 22% YoY, respectively.

The PBS data further revealed that inflation in urban areas has increased by 23.6% on a year-on-year basis in July 2022 as compared to a surge of 19.8% in the previous month and 8.7% in July 2021. On a month-on-month basis, it went up by 4.5% in July 2022 as compared to an increase of 6.2% in the previous month and an increase of 1.3% in July 2021.

Likewise, the prices in rural areas have also witnessed an upward trajectory, up by 26.9% YoY and 4.2% MoM in July 2022.

On urban region, the prices of food items that witnessed a YoY increase during the month included: pulse masoor (92.43%), onions (89.48%), mustard oil (81.95%), vegetable ghee (74.08%), cooking oil (72.56%), gram whole (67.48%), chicken (59.09%), wheat (45.02%), pulse gram (43.24%), vegetables (40.47%), fruits (39.23%), besan (37.52%), pulse mash (35.68%), rice (31.22%), meat (25.97%), milk (24.75%), eggs (23.74%), tea (23.12%) and beans (22.50%).

Meanwhile, price of non-food items whose price increased during the month in urban region included: motor fuel (94.42%), electricity charges (86.72%), liquefied hydrocarbons (45.62%), stationery (34.81%), cleaning & laundering (30.39%), washing soap/detergents/match box (24.72%), motor vehicle accessories (22.38%), construction input items (19.99%), plastic products (19.47%), footwear (19.36%) and cotton cloth (18.15%).

SPI inflation on YoY witnessed an upsurge of 28.2% YoY and 7.3% MoM in July 2022 while WPI inflation jumped by 38.5% YoY in July 2022 and 2% MoM in July 2022.

Outlook

The market expects that the fiscal year 2022-23 is expected to be a difficult year as headline inflation may settle in between 15-21% due to the risk tilted to the upside on the back of currency depreciation and rising fuel prices from levies and taxes as the government brings budgetary changes.

“Hikes in fuel and energy prices along with their 2nd round effects amid higher international petroleum prices given Ukraine war, elevated food inflation tracking higher international food prices and lagged effects of sharp rupee depreciation would propel average FY23 inflation to around 21.0% YoY”, said Zeeshan Azhar, an analyst at Foundation Securities.

Copyright Mettis Link News

Posted on: 2022-08-01T12:34:26+05:00

34382

RELATED ARTICLES
- Advertisment -

Most Popular