Inflation shows remarkable cut in Feb

ISLAMABAD  -  Inflation has significantly reduced to 23.1 percent in February this year.

Inflation measured through con­sumer price indicator (CPI) was re­corded at 23.1 percent in February, according to the latest data of Paki­stan Bureau of Statistics (PBS). The federal government for the current fiscal year 2023-24 had set an infla­tion target at 21.5 percent.

According to the latest data of PBS, the inflation on a monthly basis has increased to 1.8 percent in February 2024 as it was 1.8 percent in the pre­vious month (January). The CPI infla­tion Urban increased by 24.9 percent on a year-on-year basis in Febru­ary 2024. Meanwhile, the CPI infla­tion for Rural has enhanced by 20.5 percent. The CPI inflation increased by 27.96 percent in eight months of the current fiscal year. The Sensi­tive Price Index (SPI), which gaug­es rates of kitchen items on a week­ly basis, increased by 32.02 percent. Wholesale Price Index (WPI) infla­tion has increased by 24.66 percent in July to February 2023. The minis­try of finance had projected that the inflation outlook for the upcoming month points towards a downward trajectory owing to better crops and a smooth supply of commodities. 

Similarly, favourable input situ­ations are set to bolster Rabi crop production. On the other hand, in­dustrial activity in December re­mained positive despite a specific sectoral slowdown. Notwithstand­ing, restrictive monetary and fiscal policies, the optimism is fuelled by improvements in cyclical conditions in Pakistan’s export markets facil­itating steady economic recovery. The stabilization measures encour­aging business confidence coupled with exchange rate stability, contrib­ute to a positive economic outlook for Pakistan amidst ongoing chal­lenges, the ministry of finance not­ed in its monthly report. In February 2024, the administered prices of pet­rol and diesel increased in response to a notable surge in crude oil prices, highlighting the direct influence of global market dynamics on domes­tic fuel costs. Despite the upward ad­justment in transportation expenses and gas prices, the inflation outlook for the upcoming month may have a downward trend, primarily due to a decrease in the prices of perishable items on the back of better crops and ease in supplies. Additionally, the high base effect would further contribute to keep the inflationary pressure on the lower side. Inflation is projected to hover around 24.5-25.5 percent in February 2024, with expectations of a further easing to 23.5-24.5 percent in March 2024.

The break-up of inflation of 23.1 percent showed that food and non-alcoholic beverages pric­es increased by 18.15 percent last month. Similarly, health and educa­tion charges went up by 19.33 per­cent and 12.95 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) in­creased by 36.08 percent in the last month. Meanwhile, the prices of al­coholic beverages and tobacco went up by around 66.62 percent

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