Monday May 04 2015
Pakistan Inflation Rate Continues to Fall
Pakistan Bureau of Statistics | Joana Ferreira | joana.ferreira@tradingeconomics.com

Pakistani annual inflation rate slowed to 2.11 percent in April of 2015 from 2.49 percent in the previous month, due to a drop in fuel prices.

Although housing, water, electricity, gas and fuels prices increased 4.88 percent compared to March of 2014, kerosene oil and motor fuel prices declined 25.69 percent and 20.11 percent respectively. 

Additional price decreases were reported for: food and non-alcoholic beverages (-1.05 percent) and transport prices (-9.67 percent). 

In contrast, upward pressure came from: clothing and footwear (+7.12 percent); furnishing and household equipment (+5.01 percent); education (+13.16 percent); communication (+0.38 percent); miscellaneous goods and services (+5.09 percent); and health (+4.47 percent).

On a monthly basis, consumer prices rose 1.32 percent, the highest since July 2014, as food and non-alcoholic beverages’ prices went up by 1.53 percent and housing, water, electricity, gas and fuels cost rose 0.69 percent. Clothing and footwear prices grew 0.98 percent and transport cost increased 0.89 percent, up from -0.14 percent reported in the previous month.




Wednesday April 01 2015
Pakistan Inflation Rate at New 11-1/2-Year Low
Pakistan Bureau of Statistics | Joana Ferreira | joana.ferreira@tradingeconomics.com

Consumer prices in Pakistan rose 2.49 percent in March of 2015, down from 3.20 percent reported in the previous month, as a result of declining fuel costs.

Although housing, water, electricity, gas and fuels prices increased 5.70 percent compared to March of 2014, kerosene oil and motor fuel prices declined 30.26 percent and 23.16 percent respectively.  

Additional downward pressure came from: food and non-alcoholic beverages (-0.48 percent) and transport prices (-10.74 percent). In contrast, clothing and footwear prices went up by 7.37 percent; furnishing and household equipment grew 5.55 percent; education, communication and health prices rose 14.22 percent, 0.32 percent and 4.31 percent, respectively.

On a monthly basis, consumer prices rose 0.23 percent as food and non-alcoholic beverages’ prices went up by 0.55 percent pushed by higher costs of vegetables, fruits and other food products. In contrast, transport prices fell 0.14 percent.


Monday March 02 2015
Pakistan Inflation Rate at 11-1/2-Year Low
Pakistan Bureau of Statistics | Joana Taborda | joana.taborda@tradingeconomics.com

Pakistan annual inflation rate slowed to 3.24 percent in February of 2015 from 3.88 percent in the previous month. It is the lowest rate since September of 2003 as decline in oil prices brought transport cost down.

Year-on-year, transport prices dropped 11.12 percent after falling 8.1 percent in January. Kerosene oil decreased 29.69 percent and motor fuel declined 24.11 percent.

Upward pressures came from prices of housing, water, electricity, gas and fuels (5.72 percent), clothing and footwear (7.7 percent) and food and non-alcoholic beverages (1.19 percent). 

On a monthly basis, consumer prices fell 0.92 percent, the biggest drop since December of 2013.


Tuesday February 03 2015
Pakistan Inflation Rate Slows in January
Pakistan Bureau of Statistics | Carolina Cunha | carolina.cunha@tradingeconomics.com

Pakistan annual inflation fell to 3.88 percent in the first month of 2015, from 4.3 percent recorded in December of 2014, as transport prices dropped due to lower cost of fuel.

Year-on-year, transport prices registered the only drop (-8.1 percent). In contrast, prices accelerated for clothing and footwear (8.09 percent); furnishing and household equipment (6.42 percent); housing, water, electricity and gas (+5.74 percent) and education (+3.94 percent). 

In January, food and non-alcoholic beverages rose by 2.13 percent. Perishable food prices increased 2.64 percent while cost of non-perishable food grew 2.06 percent.  Cost of fresh milk (+7.3 percent) and meat (+5.29 percent) increased.

Annual core inflation rate (excluding food and energy) slowed for the fourth consecutive month by 0.3 percent to 6.4 percent.

On a monthly basis, prices grew marginally by 0.08 percent, after falling 1 percent in the previous month. The decline was mainly due to a 2.13 drop in transport cost and a 0.5 percent decrease in prices of food.


Monday January 26 2015
Pakistan Lowers Key Rate to 8.5%
State Bank of Pakistan | Joana Taborda | joana.taborda@tradingeconomics.com

The State Bank of Pakistan cut its key interest rate for the second straight meeting by 100 bps to 8.5 percent in January, citing lower inflationary pressure due to falling oil prices.

Excerpts from the statement by the State Bank of Pakistan:

The key macroeconomic indicators have improved further since the last monetary policy decision of November 2014. CPI inflation and its expectations continue to follow a downward trajectory. In the last two months of November and December 2014 trade deficit has declined, though it has increased in H1-FY15 when compared to H1-FY14. Moreover, considerable foreign exchange inflows have contributed in maintaining an upward trajectory in foreign exchange reserves. Containment of fiscal deficit thus far is also encouraging and bodes well for the credibility of consistent and coherent policies of the government and for the continuation of official and private capital inflows. With these positive developments, first half of the current fiscal year ended on a better macroeconomic outlook for the remaining months of FY15.

While the impact of recent policy rate cut on the economy is subject to a lag, various other factors continued to pull the headline CPI inflation on YoY basis down to 4.3 percent in December 2014. This disinflation is broad based as both food and non-food inflation have been declining. The deceleration in the former is mainly the result of better supply conditions, while the latter is explained by a combination of factors. These include plummeting international oil price as well as decline in other global commodity prices; lagged impact of earlier conservative monetary policy stance and moderating aggregate demand; and stable exchange rate. 

It is pertinent to note here that while the recent plunge in international oil price has induced low inflation and improved trade outlook, it is not without some subtle risks to future inflation. The speed and intensity, with which the inflation has come down and continues to recede, can induce expectations of rather low inflation, which may induce additional consumption. There is no doubt about the redistribution of income from oil producers to oil consumers and since the latter has a higher propensity to consume, there will be some affect on private consumption. Thus, the recent reduction in domestic commodity prices may lead to more spending and as long as additional impact on aggregate demand remains in line with aggregate supply, inflation is likely to remain low.




Friday January 02 2015
Pakistan Inflation Rate Up to 4.3% in December
Pakistan Bureau of Statistics | Carolina Cunha | carolina.cunha@tradingeconomics.com

Pakistan inflation rate rose to 4.3 percent in December of 2014 from 3.96 percent in the previous month as food, clothing and housing, water, electricity and gas prices edged up.

Year-on-year, upward pressure came from cost of clothing and footwear (+8.1 percent) mainly due to a rise in prices of cotton; housing, water, electricity, gas and fuels ( +5.84 percent) and food and non-alcoholic beverages (+2.53 percent). The transport index registered the only negative contribution (-6.02 percent). 

On a monthly basis, the inflation rate fell 1.01 percent, compared to a 0.51 percent shortfall in the previous month, driven by a 2.84 percent decline in transport cost and a 2.3 percent drop in food prices. Price of housing, water, electricity, gas and fuels remained almost unchanged (+0.02 percent).

Core inflation (excluding food and energy) increased by 6.7 percent in December of 2014 compared to 6.9 percent in November of 2014. The month-on-month rate was unchanged at - 0.5 percent.

A year ago, inflation rate was recorded at 9.2 percent.


Monday December 01 2014
Pakistan Inflation Rate at 11–Year Low
Pakistan Bureau of Statistics | Carolina Cunha | carolina.cunha@tradingeconomics.com

Pakistan inflation rate eased for the second straight month to 3.96 percent in November of 2014 from 5.82 percent in the previous month. It is the lowest rate since October of 2003 due to a fall in prices of transport and fresh food.

Year-on-year, downward pressure came from cost of fresh food (-10.6 percent) and transport (-3.19 percent). In contrast, the highest price increase was reported for housing, water, electricity, gas and fuels (5.89 percent). Cost of food and non-alcoholic beverages rose 1.08 percent.

On a monthly basis, consumer prices fell 0.51 percent, compared to a 0.2 percent increase in the previous month, driven by a 6.87 percent decline in transport cost and a 0.49 percent drop in food prices.

Core inflation (excluding food and energy) increased 6.9 percent in November of 2014 compared to 7.8 percent in October of 2014. The month-on-month rate was recorded at -0.5 percent in November compared to +0.7 percent in the previous period.

A year ago, inflation rate was recorded at 10.90 percent.


Tuesday November 18 2014
Pakistan Cuts Key Rate by 50 bps
State Bank of Pakistan | Joana Taborda | joana.taborda@tradingeconomics.com

The State Bank of Pakistan decided to lower the benchmark policy rate by 50 bps to 9.5 percent at its November meeting, citing lower inflation.

Excerpts from the statement by the State Bank of Pakistan:

Limited impact of floods and a favorable trend in global commodity prices are the major highlights of the post-September monetary policy decision.

Given its recent downward trend, the likelihood for inflation to end the current fiscal year on a lower plateau is high. But, there are risks. First, downward trend over the medium to long term remains to be seen because it is based on volatile prices of “perishable items” and “oil”. Second, other risks identified in the previous statement, such as cut in subsidy to electricity and levying of Gas Infrastructure Development Cess, still hold and if materialized can alter the inflation outlook on a higher side. Third, underlying inflationary pressures on core inflation remain.

The current low oil price could salvage some of the lost growth momentum. Broadly, however, growth in large-scale manufacturing would remain constrained due to energy bottlenecks. Thus the main thrust to the growth momentum would come from agriculture outcomes in the remaining months of FY15. Barring the limited flood-related damage to some kharif crops, agriculture output is expected to perform better than the previous year especially now when incentive for Rabbi season crops has been announced; such as, the recent increase of Rs100 in wheat support price.

Government has shown a significant progress in curtailing budgetary imbalances. It seems on course to achieve further fiscal consolidation, given its current management of expenditures and borrowing pattern. This has positive implications for the monetary management of the SBP and more importantly, in the coming months, it would have a favorable impact on the private sector credit cycle. However, to achieve fiscal consolidation in the long run, structural reforms to broaden the tax base remain imperative.


Wednesday November 19 2014
Pakistan Inflation Rate Down to 17-Month Low
Pakistan Bureau of Statistics | Carolina Cunha | carolina.cunha@tradingeconomics.com

Pakistan annual inflation rate slowed to 5.8 percent in October of 2014 compared to 7.7 percent in September. Downward pressures came mostly from lower food, oil and gas prices.

In October, prices decelerated for food and non-alcoholic beverages (4.41 percent yoy from 6.47 percent in the previous month); housing, water, electricity, gas and fuels (5.62 percent from 8.84 percent); transport (3.95 percent from 5.43 percent). In contrast, prices accelerated for furnishing and household equipment maintenance (7.84 percent from 8.49 percent) and restaurants and hotels (8.5 percent from 9.17 percent).

Year-on-year core inflation (excluding food and energy) decreased to 7.8 percent in October of 2014 compared to 8.1 percent in September. The month-on-month rate was recorded at 0.7 percent in October, the same rate as in September.

On a monthly basis, the inflation rate eased to 0.2 percent, compared to 0.4 percent in the previous month, mainly driven by a 1.60 percent decline in perishable food prices.


Wednesday October 01 2014
Pakistan Inflation Rate Up to 7.7%
Pakistan Bureau of Statistics | Ricardo Martins | contact@tradingeconomics.com

Pakistan annual inflation rate rose to 7.7 percent in September of 2014 from 7 percent in August of 2014, accelerating for the first time in four months. The increase was mainly due to higher food and electricity prices.

The main contributors to rise in the CPI were housing, water, electricity, gas and fuels (8.84 percent), mainly electricity (15.82 percent); non-perishable food items (4.77 percent) and perishable food items (15.95 percent).

Among food items, potatoes rose the most (99.7 percent) followed by cigarettes (22.6 percent). In contrast, tea and onions decreased 17.61 percent and 9.42 percent respectively. Additional upward pressures came from a rise in motor vehicle tax (36.71 percent) and education cost (15.28 percent).

Year-on-year core inflation (excluding food and energy) increased by 8.1 percent in September of 2014 compared to 7.9 percent in August. The month-on-month core rate also increased to 0.6 percent in September from 0.2 percent in August.

On a monthly basis, the inflation rate edged up to 0.4 percent in September of 2014, compared to 0.3 percent in the previous month, driven by a 3.22 percent increase in transport cost.