KARACHI: The Consumer Price Index (CPI) inflation general increased by 3.88 percent on year-on-year in the first half of Fiscal Year 2016-17 (FY17) as compared to an increase of 2.08 in same period of last fiscal.
In the month of December 2016, it increased by 3.7 percent on a YoY basis as compared to an increase of 3.8 percent in the previous month and 3.2 percent in December 2015, according to data released by Pakistan Bureau of Statistics (PBS) on Monday.
The State Bank of Pakistan (SBP) attributed this increase to a number of seasonal and supply-side factors including buoyancy in food prices as both the Eids fell during the half, supply shortages of fresh vegetables that exacerbated the seasonal impact on their prices, subsiding global deflation in key commodities (like crude oil and industrial inputs) along with a recovery in prices of major food items (palm oil and rice) during the quarter, increase in regulatory duties on few import items in Federal Budget 2016-17 (e.g, powder milk) and other fiscal measures to increase tax mobilisation.
“We expect average CPI inflation in FY17 to remain lower than the target of 6 percent set by the government”, said the SBP.
The ongoing rebalancing in China, the ultimate outcome on Brexit, and the change in political regime in the US, will have a strong influence over the direction of the global economy and commodity prices. There has been a partial recovery in commodity prices from January 2016 onwards, but this has been patchy and is seemingly susceptible to exogenous shocks at best, it added.
On month-on-month basis, it decreased by 0.7 percent in December 2016 as compared to an increase of 0.2 percent in the previous month and a decrease of 0.6 percent in December 2015.
Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 5.2 percent on (YoY) basis in December 2016 as compared to increase of 5.3 percent in the previous month and 4.1 percent in December 2015. On (MoM) basis, it increased by 0.1 percent in December 2016 as compared to increase of 0.2 percent in previous month ,and an increase of 0.2 percent in corresponding month of last year i.e. December 2015.
