Inflation at lowest level since December but still above government target

A shopkeeper is using a calculator in this undated photo.  - Reuters/File
A shopkeeper is using a calculator in this undated photo. – Reuters/File
  • Average inflation for the first four months of FY24 is 28.5%.
  • The rate for FY24 is still higher than the government’s target of 21%.
  • Inflation in rural areas is much higher than in urban centres.

ISLAMABAD: Pakistan’s inflation rate fell to 26.9% in October 2023, taking it to the lowest level since December last year, reports said news Citing the Pakistan Bureau of Statistics (PBS) Consumer Price Index (CPI) Bulletin on Thursday.

The inflation rate has also declined significantly from a four-month high of 31.4% in September.

Average inflation reached 28.5% in the first four months of the current financial year. However, the bulletin said the reading is still higher than the government’s target of 21% for the current fiscal year.

It is noteworthy that inflation was at a record level of 38% in May. Inflation has remained high since November 2021 and is in the double-digit region.

The rate is the lowest ever mainly due to a sharp decline in food inflation, which fell to a 16-month low of 26.8% compared to 33.1% in September.

The bulletin further said that prices of alcoholic beverages and tobacco witnessed an increase of 84.6% in October, compared to 87.5% in September. The entertainment and culture category also saw significant growth with a growth of 56.3%, slightly lower than the 58.8% recorded in September.

Furthermore, Furniture declined to 37.1% compared to 39.3% last month.

However, the report said that several changes were observed in prices during the month of October. Hotel charges rose 33%, down slightly from 34.3% in September. Transportation expenditure remained stable at 31.3% as in September.

Housing and utilities declined to 20.5% from 29.7% the previous month. Health expenditure also saw a minimal decline from 25.3% to 25.2%. Clothing and footwear remained stable at 20.6% and education expenditure increased from 11.1% to 12.8%.

In September, inflation rose 1.1%, following a 2% rise in the previous month.

Notably, core inflation, which excludes food and energy components, stood at 18.5% compared with 18.6% in September and 18.4% in August.

The Wholesale Price Index (WPI), a measure of producer prices, rose to 24.6% in October from 26.4% in September. The Sensitive Price Indicator (SPI), which tracks prices of essential commodities on a weekly basis, rose to 34.2% in October from 32% in September.

Inflation in rural areas was much higher at 28.9% compared to 25.5% seen in urban areas. In the last month, both urban and rural inflation increased by 1.1%.

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