July Inflation reaches 10.34pc, highest in last six years

CPI based inflation was recorded at 10.34 percent during July 2019 over the same period of previous FY

ISLAMABAD     -    Pakistan’s inflation rate has touched double digit figure of 10.34 percent in July 2019, which is highest in last six years, mainly due to the economic policies of the incumbent government including rupee devaluation and increase in energy costs. Inflation rate has recorded at 10.34 percent in July 2019, which was only 5.8 percent in the same month of the previous year, according to the latest data of Pakistan Bureau of Statistics (PBS). Inflation is at higher side mainly due to the impact of the incumbent government’s economic policies including devaluing the currency, increasing gas and electricity prices and massive borrowing from the central bank.

Inflation increased by 2.3 percent in July 2019 on month-on-month basis, as compared to an increase of 0.4 percent in the previous month.  Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 7.8 percent on (YoY) basis in July 2019 as compared to an increase of 7.2 percent in the previous month and 7.6 percent in July 2018.

The inflation would continue to increase in the months to come due to the economic policies of the incumbent government. According to the government’s estimates, the average inflation is expected to be 8.5 percent in the next fiscal year (2019-20) that may touch 10 percent by fiscal year 2020-21. Main reasons behind expected increase in inflation rate are government’s commitments with IMF and continuous hike in oil prices.  The government on Wednesday increased prices of high speed diesel and petrol by Rs 5.65 and Rs 5.15 per liter, respectively. Following Ogra’s recommendation, the government also jacked up price of kerosene oil by Rs 5.38 per liter and light diesel oil by Rs8.90 per liter. This would further fuel the inflation rate in the months to come.   Former finance minister and National Assembly’s Standing Committee on Finance Chairman Asad Umar has recently warned that rate of inflation will remain high over the next two to four months, before it begins to decline. He further said that he told the Competition Commission of Pakistan to inquire rise in prices of five consumable items including sugar.

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