Inflation drops to 27.4pc in Aug despite massive rise in oil, power prices

ISLAMABAD-Inflation has eased to 27.4 percent in August despite massive increase in oil and electricity prices. Inflation measured through consumer price indicator (CPI) was recorded at 27.4 percent in August this year as against 28.3 percent in the preceding month (July). Inflation has eased despite massive increase in petroleum products prices and electricity tariff in the last couple of months. The inflation might again increase in the days to come as the government has once again enhanced the prices of oil products and there has been massive currency depreciation in the last few weeks.
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 Pakistan Bureau of Statistics (PBS), the inflation on monthly basis has increased by 1.7 percent in August 2023 as compared to an increase of 3.5 percent in the previous month. The CPI inflation Urban increased by 25 percent on a year-on-year basis in July 2023. Meanwhile, the CPI inflation for Rural has enhanced by 30.9 percent. The Sensitive Price Index (SPI), which gauges rates of kitchen items on a weekly basis, increased by 28.61 percent. On a monthly basis, Wholesale Price Index (WPI) inflation on YoY basis increased by 23.69 percent in August 2023.
The break-up of inflation of 27.4 percent showed that food and non-alcoholic beverages prices increased by 38.51 percent last month. Similarly, health and education charges went up by 22.55 percent and 10.47 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 6.25 percent in the last month. Meanwhile, the prices of alcoholic beverages and tobacco went up by around 97.51 percent. Prices of clothing and footwear increased by 18.46 percent and furnishing and household equipment maintenance charges 41.71 percent. Recreational charges and those related to culture went up by 61.38 percent in the period under review, while amounts charged by restaurants and hotels by 34.01 percent in August 2023 as compared to the same month last year. In urban areas, the food items which saw their prices increased during August 2023 included tomatoes (75.35 percent), condiments and spices (16.98 percent), eggs (16.26 percent), sugar (9.03 percent), beverages (6.18 percent), pulse mash (5.56 percent), milk powder (5.52 percent), wheat products (5.05 percent), potatoes (4.38 percent), rice (2.68 percent), pulse moong (2.26 percent), pulse gram (2.22 percent), milk fresh (1.57 percent) and meat (1.42 percent). In non-food commodities, prices of following commodities enhanced: liquified hydrocarbons (14.64 percent), water supply (11.68 percent), motor fuel (8.29 percent), mechanical services (5.42 percent), transport services (3.95 percent), solid fuel (3.28 percent), drugs and medicines (3.15 percent) and construction wages rates (2.01 percent).

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