ISLAMABAD: Inflation rate has fallen to 3.8 percent in February despite continuous increase in petroleum products prices and the government’s decisions to devalue the rupee against the US dollar.
Inflation measured through Consumer Price Index (CPI) has recorded at 3.8 percent in February 2018 as against the same month of the previous year, according to the latest data of Pakistan Bureau of Statistics (PBS).
The inflation had recorded at more than 4 percent during last three months (November to January).
Due to increase in inflation, the State Bank of Pakistan had raised the interest rate to 6 percent to pre-empt overheating of the economy and inflation breaching its target rate. The central bank has also warned that inflation would increase in the months to come due to impact of rupee depreciation and rising international oil prices.
However, it has come down to 3.8 percent during February that contradicted the SBP projections.
The federal government is continuously increasing the petroleum products prices from last several months. Apart from the SBP, the economic experts also believed that rising oil prices would fuel the inflation rate. The government on Wednesday once again increased the price of petrol by Rs3.56 per litre, high speed diesel by Rs2.62 per litre, superior kerosene oil Rs6.28 per litre and light diesel oil by RE1 per liter for the month of March.
The increase in oil prices would increase the transportation charges, which directly impact the prices of basic food commodities.
On month-on-month basis, inflation decreased by 0.3 percent in February 2018 as compared to a decrease of 0.10 percent in the previous month.
Meanwhile, core inflation measured by non-food non-energy CPI (Core NFNE) increased by 5.2 percent on annual basis in February 2018 as compared to an increase of 5.2 percent in the previous month and 5.3 percent in February 2017.
According to PBS, the CPI-based inflation was recorded at 3.84 percent during first eight months (July-February) of the current fiscal year.
The Sensitive Price Indicator (SPI), which gauges rates of kitchen items on weekly basis, increased by 1.31 percent. Similarly, the wholesale price index (WPI) based inflation enhanced by 2.58 percent in the period under review.
The government and the SBP believed that the average inflation for the current financial year is projected to fall in the range of 4.5 to 5.5 percent, end of fiscal year YoY inflation is likely to inch towards the annual target of 6 percent.
The break-up of inflation of 3.8 percent showed that food and non-alcoholic beverages prices increased by 3.42 percent. Similarly, health and education charges went up by 4.95 percent and 12.13 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 4.2 percent in last the month.
Meanwhile, the prices of alcoholic beverages and tobacco went down by around 17.43 percent.
Price of clothing and footwear increased by 4.56 percent and furnishing and household equipment maintenance charges 4.09 percent.
Recreational charges and those related to culture went up by 0.88 percent in the period under review, while amounts charged by restaurants and hotels by 6.52 percent in February 2018 as compared to the same month last year.
In food commodities, price of betel leaves and nuts increased by 53.06 percent, fresh fruits prices enhanced by 5.83 percent and tea price went up by 1.74 percent during February as compared to the month of January.
In non-food commodities, price of kerosene oil enhanced by 3.75 percent, motor fuel 2.1 percent and Doctor Fees went up by 1.93 percent.
According to the PBS figures, price of onions decreased by 25.29 percent, tomatoes 20.52 percent, eggs 10.02 percent, fresh vegetables 8.1 percent, chicken 5.02 percent, gur 4.66 percent and sugar prices went down by Rs3.44 percent during February over January.
