ISLAMABAD: The Finance Ministry has bound high expectations for further lowering inflation ratio in the country through effective monetary measures.
Consumer Price Index (CPI) inflation is recorded at 3.9% on year-on year basis in January last as compared to 4.3% in the previous month and 7.9% in the corresponding month of last year.
CPI inflation on month-on-month basis is recorded at 0.1% in January 2015 as compared to -1.0% in the previous month and 0.5% during the corresponding month of last year. Seasonally adjusted month-on- month CPI inflation is recorded at -0.2% in January 2015 compared to 0.2% in the previous month.
The concerned wing in collaboration with the State Bank of Pakistan (SBP) is fully alive to the decreasing trend of inflation rate in result of positive financial indicators and deliberating on further steps including tightening the monetary policy as well as interest rates to ensure stable index” a well placed source at Finance Ministry told this scribe here on Friday.
The existing methodology for estimating inflation diffusion index will also be modernized and improved as a measure to curtail inflation in the country.
The method in use measures inflation in the 487 commodities of the CPI basket. It is based on month-on-month (MoM) change in the prices of these commodities and can be obtained by estimating what is known as an ‘Inflation Diffusion Index’ (IDI).
Number of Commodities with in MoM change-Number of Commodities with in MoM change Number of Commodities for which prices are reported.
Therefore, it is the difference between the share of items with increasing prices and the share of items with falling prices in CPI amongst the commodities for which prices have altered or remained constant
Based upon commodity level price data from July 2001 to February 2011 we computed inflation diffusion indices overall CPI basket and for all groups in CPI basket. A simple analysis suggests that IDI is a leading indicator for Pakistan’s YoY inflation.
Core inflation (trimmed) on year-on-year basis decreased to 4.8% in January 2015 as compared to 5.2% in the previous month and 8.2% during the corresponding month of last year.
On month-on-month basis, the Core inflation (trimmed) recorded at 0.3% in January 2015 as compared to zero core inflation in the previous and 0.6% in the corresponding month of last year.
Non-food, non-energy inflation measured by CPI Core (NFNE) on year-on-year basis decreased to 6.4% in January 2015 as compared to 6.7% in the previous month. It was 8.1% in the corresponding month of last year.
Core NFNE inflation on month-on-month basis increased to 0.7% in January 2015 as compared to 0.1% in the previous month. An 1.0% increase in Core NFNE index was observed in January 2014.
WPI inflation on year-on-year basis decreased to -2.4% in January 2015 when compared to -0.9% a month earlier. During January 2014, WPI inflation was recorded at 8.1%.
WPI inflation on month-on-month basis recorded at -1.0% in January 2015 as compared to -1.9% in the previous and 0.5% in the corresponding month of last year.
SPI inflation on year-on-year basis decreased to 0.4% in January 2015 as compared to 0.5% in the previous month. It was 9.5% in the corresponding month of last year.
SPI inflation on month-on-month basis recorded at -0.9% in January 2015 as compared to -1.3% in the previous month and -0.8%t in the corresponding month of last year.
