Islamabad, 3 June 2024, (GNP): Pakistan’s consumer price index (CPI) increased by 11.8% in May compared to the same month last year, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday. This is the lowest inflation rate in 30 months and falls short of the finance ministry’s forecasts.
The lowest inflation reading comes a week before the central bank’s review of the key rate, which has remained at a historic high of 22% for seven consecutive policy meetings.
Pakistan has faced inflation above 20% since May 2022. In May of the previous year, inflation peaked at 38% as the country underwent reforms under an International Monetary Fund (IMF) bailout program. However, inflation has since moderated.
Month-on-month consumer prices dropped by 3.2%, the largest decline in over two years.
In its monthly economic report released last week, Pakistan’s finance ministry projected inflation to range between 13.5% and 14.5% in May, with an expected decrease to 12.5% to 13.5% by June 2024.
“The inflation outlook for May 2024 remains on a downward trend, driven by high inflation levels in the previous year and improvements in the domestic supply chain of perishable items, staple foods like wheat, and reduced transportation costs,” the report stated.
Actual figures have been even lower due to a sharper decline in food prices, noted Amreen Soorani, head of research at JS Global Capital.
Month-on-month
Urban:
The items with the most significant month-on-month (MoM) price increases included Potatoes (14.73%), Meat (4.06%), Beans (3.91%), Eggs (1.60%), Vegetable Ghee (1.27%), Cooking Oil (1.26%), Dental Services (14.64%), Doctor (MBBS) Clinic Fee (5.48%), Transport Services (3.35%), Hospital Services (2.73%), and Textbooks (2.33%).
The items with the most substantial MoM price decreases were Tomatoes (51.23%), Onions (51.15%), Chicken (35.28%), Wheat (22.17%), Wheat Flour (20.12%), Fresh Fruits (8.06%), Liquified Hydrocarbons (9.45%), Electricity Charges (4.50%), Motor Fuel (3.18%), and Communication Apparatus (2.35%).
Rural:
The items with the most notable MoM price increases included Potatoes (22.49%), Meat (2.18%), Milk Powder (1.52%), Beverages (1.37%), Pulse Gram (1.08%), Education (2.76%), Plastic Products (2.07%), and Marriage Hall Charges (2.01%).
The items with the most significant MoM price decreases included Tomatoes (57.91%), Onions (47.97%), Chicken (37.57%), Wheat Flour (18.80%), Wheat (18.14%), Fresh Vegetables (17.96%), Liquified Hydrocarbons (7.84%), Electricity Charges (4.50%), and Motor Fuels (3.41%).
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Year-on-year
Urban:
Items that saw year-on-year (YoY) price increases included Gas Charges (318.74%), Electricity Charges (58.78%), Transport Services (32.28%), Onions (86.64%), Tomatoes (55.46%), Condiments and Spices (39.17%), Beans (30.89%), and Fish (29.64%).
Items that experienced YoY price decreases included Wheat (29.06%), Wheat Flour (28.48%), Chicken (22.30%), Cooking Oil (19.39%), Fresh Fruits (18.20%), Vegetable Ghee (16.51%), Mustard Oil (15.14%), Eggs (8.50%), and Liquified Hydrocarbons (11.18%).
Rural:
Items with YoY price increases included Onions (82.08%), Tomatoes (73.95%), Beans (38.06%), Fresh Vegetables (28.22%), Fish (24.29%), Electricity Charges (58.78%), Transport Services (48.59%), Water Supply (31.65%), and Education (24.19%).
Items with YoY price decreases included Wheat Flour (28.38%), Wheat (25.82%), Chicken (25.30%), Fresh Fruits (22.40%), and Liquified Hydrocarbons (3.99%).
