Brief respite from inflation reversed in December

ISLAMABAD: The consumer inflation rate rose again to 24.5% in December – after a temporary decline to 23.8% in November – hitting the country’s rural population hardest, with prices rising by almost 29%.

Half-year average inflation (July-Dec 2022) increased to 25.02pc when compared to the same period a year ago. It was most pronounced at around 28% in rural areas – home to more than two-thirds of the population – compared to their urban counterparts who faced inflation of 21.6% in December and a six-month average of 23.1%.

Monthly data for December 2022 reported by the Pakistan Bureau of Statistics (PBS) showed that all groups making up the national consumer price index (CPI) showed an upward trend, except for perishable foods. But the most damaging impact came in the form of food inflation of 35.5pc in Dec 2022 and the rise in the perishable item price rate was even greater (56pc) in Dec 2022 when compared to Dec 2021.

Everything except perishable food got more expensive in the last month of 2022 </blockquote> Urban inflation increased to 21.6% year-on-year in December 2022, compared with an increase of 21.6% in the previous month and 12.7% in December 2021. The rural CPI, on the other hand, rose to 28.8% in the annual comparison. annual basis in December 2022 compared to an increase of 27.2% in the previous month and 11.6% in December 2021. The increase in the pace of inflation was broadly in line with the Ministry of Finance’s expectations, which forecast average annual inflation of between 21-23pc. Core (urban) inflation, measured after excluding volatile food and energy prices, rose to 14.7% year-on-year in December 2022, compared with an increase of 14.6% the previous month and 8. 3% in December 2021. On a monthly basis (MoM), it increased by 1.2pc in December 2022 compared to an increase of 0.8pc in the previous month and an increase of 1.1pc in the corresponding month last year, i.e. December 2021. Inflation (rural) increased to 19pc on an annual basis in December 2022 compared to an increase of 18.5pc in the previous month and 8.9pc in December 2021. On a MoM basis, it increased by 1.5pc in December 2022 compared to a 2.1% increase in the previous month and a 1.1% increase in the corresponding month last year, i.e. December 2021. PBS data showed that prices for most foods rose significantly. Some of the top food commodities that were more expensive in December 2022 than the same month last year included onions (414.98 to 463.5pc), tea (63.81pc), wheat (57.26pc), eggs (54 .38pc), whole grass (53.18pc), rice (46.61pc), besan (46.41pc), pulse grass (45.2pc), chicken (43.76pc), pulse moong (42.82pc) , mustard oil (41.48pc), wheat flour (40.58pc), pulse puree (38.28pc), cooking oil (31.97pc), vegetable ghee (30.07pc), fresh milk (26pc) , potato (24.72pc), dried fruit (36.25pc), fresh fruit (33.94pc) and pulse masoor (24.61pc). On the other hand, condiment and spice prices dropped by 8.05pc and gur 2.68pc in Dec 2022 compared to the previous year. <figure class="media sm:w-1/2 w-full media--right media--uneven media--stretch"> <iframe class="nk-iframe" onload="setInterval(()=>{try{this.style.height=this.contentWindow.document.body.scrollHeight+’px’;}catch{}}, 100)” width=”100%” frameborder=”0″ scrolling=”no” style=”height:400px;position:relative” src=”https://www.dawn.com/news/card/1708035″ sandbox=”allow-same-origin allow-scripts allow-popups allow-modals allow-forms”>

Among non-food products, the prices of items that increased were fuel (49.45pc), soap/detergents/box of matches (46.65pc), stationery (46.56pc), construction supplies (30.59pc ), motor vehicle accessories (29.36pc), solid fuel (28.62pc), wool ready-to-wear (24.12pc), domestic servants (20.46pc) and construction wages (13.7pc).

On a MoM basis, the main food commodity prices showing increase in December 2022 from November were fresh fruits (13.36pc), onions (9.99pc), eggs (9.71pc), wheat (9.45pc) , dried fruits (8.84pc), rice (5.85pc), chicken (5.43pc), beans (3.81pc), wheat flour (3.66pc), sugar (3.12pc), fresh milk (1 .51pc) and pulse moong (0.32pc).

Similarly, prices for non-food items such as solid fuel increased by 6.63pc, soap/detergents/matchbox (5.11pc), woolen apparel (3.06pc), woolen fabrics (2.03pc), stationery (1.91pc), wedding fees (1.68pc) and construction items (1.51pc).

On the other hand, prices for tomatoes decreased 53.96pc, fresh vegetables (24.89pc), potatoes (21.33pc), besan (3.23pc), pulse masoor (2.41pc), pulse gram (2. 14pc), vegetable ghee (2.03 pc), whole grass (1.9 pc), cooking oil (1.39 pc), gur (0.31 pc) and pulse puree (0.26 pc).

Among non-food items, electricity and fuel prices fell by 3.34pc and 1.82pc respectively from November to December.

Posted on Dawn, January 3, 2023

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