Food price spike fuels inflation in March – Newspaper

Inflation, as measured by the Consumer Price Index (CPI), reached its highest level since January 22. Inflation in January was recorded at 13pc and February 2020 recorded the second-highest increase of 12.4pc.

Islamabad: Consumer goods prices rose slightly to 12.7% from 12.2% in March, driven by higher prices for perishables, according to data from the Pakistan Bureau of Statistics (PBS) released on Friday.

Prime Minister Imran Khan cut oil prices in March. Oil prices, which were frozen at their current levels during the month of March, will remain at these levels until June 30th. Sales tax on all POL products was reduced to zero, which in March caused the tax agency to spend Rs 45 billion to provide relief to consumers.

Similarly, the decision to reduce Rs5 in electricity bills will reduce consumer bills. These factors likely include the country’s non-food inflation. Year-over-year (YoY) increases in inflation in recent months have been driven primarily by soaring prices for fuel, electricity, home rentals, transportation and non-perishable food.

The Ministry of Finance said in a March update that the global economy faces three challenges from the ongoing war between Russia and Ukraine: financial sanctions, commodity prices and supply chain disruption. These challenges have fueled global inflation and have cut growth prospects for most countries, he added.

According to the report, in order to recover inflation, it is necessary to limit the price increase in the previous month (MoM) as much as possible. So we realized that government policy continued to focus on limiting these monthly increases.

As geopolitical tensions escalate, expectations for further increases in international commodity prices are rising. The government is taking possible steps to curb the transfer of these increases to domestic consumer prices, particularly through relief packages.

PBS data shows that food inflation remains high over the past nine months. Urban areas rose 14.5% year-on-year and 1.8% month-on-month in March, while rural areas rose 15.5% and 2.3%, respectively.

However, PBS data showed that non-food inflation in rural areas was higher than in urban areas. This is in contrast to the trend in which urban areas typically experience higher inflation.

Pakistan’s average inflation in July-March rose 10.77% year-over-year. Annual CPI inflation for 2020-21 was recorded at 8.90% from 10.74% in the previous year.

At the same time, meat, fruit and vegetable prices continued to rise in major cities and rural areas.

Inflation rates in non-food cities increased by 10.4% YoY and 0.1% MoM, while those in rural areas increased by 12.5% ​​and 0.2%, respectively. The increase in non-food inflation was mainly driven by higher oil prices in March.

In March, the prices of foods that increased from the previous month were 33.63 chicken, 15.17 fruit, 8.73 mustard oil, 8.32 vegetable butter, 7.01 onion, 5.05 cooking oil, 2.11 gram barrel, 1.92pc tea, 1.52pc milk, 0.91 besan. pc.

In urban areas, 36.53 tomatoes, 14.75 eggs, 4.89 wheat, 3.68 potatoes, 2.38 seasonings, 1.10 rolls, 1.08 wheat flour and 1.02 sugar fell, respectively. A similar trend was observed in the price of daily necessities in rural areas.

Core inflation in urban areas was 7.8% in the previous month from 8.9% in March. The corresponding increase in rural areas increased by 10.3% compared to 9.4%.

Posted at Serb on April 2nd, 2022