Consumer Price Index (CPI) inflation during December 2016 experienced an increase of 3.7% Year-over-Year (YoY), however, on a month-on-month basis inflation decreased 0.7% in December 2016 as compared to November 2016, Pakistan Bureau of Statistics (PBS) reported Monday.
Many experts believe that the main reason behind the monthly drop in inflation was reduction in prices of both non-perishable and perishable food items along with transportation cost. Also, it was the second consecutive month that annual inflation drops after increasing for five straight months.
“We expect average CPI inflation in FY17 to remain lower than the target of 6 percent set by the government”, said the State Bank of Pakistan (SBP). The implications of Brexit, ongoing trade and currency rebalancing in China keeping in mind regime change in the US, will strongly influence the direction of the global economy and commodity prices. SBP added that there had been a partial recovery in commodity prices from January 2016 onwards, but this was patchy and susceptible to exogenous shocks at its best.
Core inflation measured by non-food non-energy CPI (Core NFNE) surged by 5.2% on Year-over-Year (YoY) basis in December 2016 as compared to increase of 5.3% in the previous month and 4.1% in December 2015. On Month-on-Month (MoM) basis, inflation increased by 0.1% in December 2016 as compared to increase of 0.2 % in previous month , and an increase of 0.2 percent in corresponding month of last year i.e. December 2015.
Top food items, which experienced increase in their average prices during the last month are as follows:
- Gram flour
- Vegetable ghee.
The items, which recorded decrease in their average prices includes:
- Fresh vegetables
- Pulse mash
- Pulse masoor
- Pulse moong.
The nonfood items with increasing trend included motor fuel, kerosene, tailoring, woolen cloth, newspaper, firewood and medical equipment.