CPI-based inflation in Pakistan projected to drop below 7 per cent this month

ISLAMABAD: Pakistan’s Consumer Price Index-based inflation rate is expected to ease to 6.5 per cent in October, marking a slowdown compared to September’s 6.9 per cent.

This would be the lowest inflation rate since January 2021, showing signs of further relief for the public.

On a monthly basis, inflation is projected to rise by 0.7 per cent, a smaller increase than expected, thanks to stable electricity costs. The Pakistan Bureau of Statistics (PBS) weekly data show no significant spike in power prices, which is a key factor keeping inflation in check.

Transport inflation is also predicted to drop significantly, down by 6.3 per cent compared to last year.

This is largely due to falling global fuel prices and a stable exchange rate, which has allowed the government to cut fuel prices, easing the burden on consumers.

Food prices, which had pushed inflation to record highs last year, are now seeing a downturn. It’s expected that food costs will have dipped by 0.1 per cent compared to last year, giving further relief to households.

However, the picture isn’t entirely rosy. Housing and energy inflation is forecasted to remain stubbornly high, with an annual increase of 18.8 per cent. This is mainly due to higher electricity and gas charges, along with a quarterly rent adjustment. On a monthly basis, this sector is expected to see a 1.3 per cent jump.

Although the government had delayed energy price hikes until October to meet conditions set by the International Monetary Fund (IMF), the PBS data suggests that the surge has been less dramatic than feared.

However, housing and energy costs continue to be the biggest contributors to overall inflation, accounting for more than half of the total increase in the Consumer Price Index (CPI).

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