ISLAMABAD: Due to the huge cut in oil prices in the last six months, the country witnessed the lowest level of inflation in over a decade in March, when the inflation rate dropped to 2.5 per cent
According to the Pakistan Bureau of Statistics (PBS), the annual Consumer Price Index (CPI) inflation decreased to 2.5 per cent in March – the lowest level since September 2003 – from 3.2pc in the previous month.
In March, annual food inflation rose to 0.5pc, while that of non-perishable food items and perishable items increased to 0.07pc and 0.12pc, respectively. The food items whose price increased included onions (23.92pc), tomatoes (8.19pc), fresh fruits (5.97pc), fresh vegetables (4.26pc), chicken (1.92pc) and tomato ketchup (1.25pc).
On the other hand, year-on-year non-food inflation was 3.9pc in March. International oil prices dipped to their lowest level of around $47 a barrel during February, but surged to over $51 a barrel in March.
The decreasing inflation had forced the central bank to slash the discount rate by 50 basis points to 8 percent in its last monetary policy announcement. The SBP projected that headline CPI inflation continues to follow a downward trajectory and is expected to be well below the annual target of 8.0 percent; latest SBP projection range is 4-5 percent for average CPI inflation in FY15.
However the Asian Development Bank (ADB) had estimated that headline inflation is expected to average 5.8 percent in FY2015, assuming some rise in oil prices from lows in the first half of FY201.
