CPI inflation raised to 24.5% in December

By Ali Imran

ISLAMABAD: Annual inflation measured by the Consumer Price Index (CPI) was recorded at 24.5 per cent in December, compared to 23.8pc in the previous month, as food and transport costs continued to remain high, data shared by the Pakistan Bureau of Statistics (PBS) showed on Monday.
Inflation rose 0.5pc on a month-on-month basis, compared to a 0.76pc increase in November. To calculate headline inflation, which captures all the goods and services in an economy, the CPI tracks the prices of 356 items from urban areas and 244 items from rural areas. Topline Securities said that inflation remained in line with market expectations.
PBS data showed a double-digit increase in almost all indices, except housing and utilities, and communication. However, perishable food items and transport, which have been the main drivers of inflation over the past months, decreased 12.58pc and 0.81pc on a month-on-month basis.
Last week, the finance ministry’s forecast said inflation would stay high — between 21-23pc during the current fiscal year.
“For FY23, economic growth is likely to remain below the budgeted target due to devastation caused by floods. This combination of low growth, high inflation and low levels of official foreign exchange reserves are the key challenges for policymakers,” the ministry said in its Monthly Economic Update and Outlook.
Pakistan has been in the grips of decades-high inflation in the past few months but the CPI hike slowed down in September to 23.2pc from a 49-year high of 27.2pc in August.
The trend reversed the very next month when headline inflation rose sharply to 26.6pc in October, prompting the central bank to raise the key policy rate by 100 basis points to a 24-year high of 16pc in a decision it said was “aimed at ensuring that elevated inflation does not become entrenched”.