During the month of September, food prices in Pakistan went sky high, adding significantly to the inflation rate during that month. Things are, however, coming back to normal as inflation rate during the month of October went down from 3.9% in to 3.8% in October. Even though the decrease was minimal, it showed that food prices were coming back to normality.
In October, inflation on food items decreased to only 2.2% while inflation on non-food items remained unchanged at 4.9% during the month. The data was given by the Pakistan Bureau of Statistics (PBS), which also said that core inflation i.e. non-food non-energy inflation also went down by a slight margin to 5.3% in the month of October.
Core inflation is the core factor to measure inflation and State Bank of Pakistan (SBP) uses it to design its monetary policy, covering 43 items out of the total 89 commodity groups. Core inflation in Pakistan has been on the higher side due to increase in the prices of transportation, health care facilities, housing schemes, and education in the country. The major increase was found in the education sector as educational cost went up by 11% after an increase in the prices by schools, colleges, and universities for the new session that starts in August-September.
The main reason for the increase in prices of food items during the month of September was attributed to the lack of supply of goods. The increase in prices during the month of September was not aligned with the trend that was witnessed in the month of July and August during the current fiscal year.
Inflation surge was visible in onions and tomatoes,specifically, as the prices of these items increased by 178% and 71% respectively on YoY basis. Rice and potatoes witnessed an increase of 14% and 12% respectively on YoY basis. Other significant changes in the prices of items as compared to last year were in cigarettes 16.5%, tea 11%, pulse 18.5%, chicken 16.7%, sugar 21.2%, and others.
SBP in its latest report said that the government of Pakistan will be able to meet its annual inflation target of 6% for the current year. This is because of the increased supply process of food items and the decrease in prices of oil that has been passed on to the domestic market.