KARACHI: Annual consumer inflation eased to 8.82 percent year-on-year in April after having peaked to more than five years high of 9.41 percent in March, but the current tally is still above the government’s annual target and invites hawkish stance of the central bank in the monetary policy, The News reported.[the_ad id=”31605″]The Pakistan Bureau of Statistics (PBS) on Thursday said consumer price index (CPI) inflation increased by 1.3 percent in April 2019 as compared to an increase of 1.4 percent in the previous month and an increase of 1.8 percent in the corresponding month a year earlier.
Analysts said the inflation was as per the market expectation in the wake of respite from rise in prices of food items that account for more than a third of the index makeup.
“It was expected with tomato prices coming down,” Mohammad Sohail, head of brokerage Topline Research said.
Food prices that saw decline in April over March included tomatoes (41.42pc), eggs (19.88pc), wheat (1.97pc), gram whole (1.20pc), pulse gram (0.90pc), wheat product (0.80pc), wheat flour (0.77pc), beans (0.54pc), dry fruit (0.53pc), Besan (0.45pc), pulse mash (0.37pc).
Sohail said inflation outlook depends on many things, including prices of food, petroleum products, power and gas.
The central bank’s new forecast suggested that the headline CPI inflation would remain in the range of 6.5 to 7.5 percent for the current fiscal year “on the back of higher energy prices and the lagged impact of exchange rate depreciation”. The government targeted consumer inflation at 6 percent in FY2019.
Trigger by weak exchange rate and oil price hike, inflation is on the upward trend. The rupee has lost around 35 percent since December 2017.
The State Bank of Pakistan (SBP) shunned its soft monetary policy stance in January 2017 and since then it cumulatively raised the key benchmark interest rate by 500 basis points. The SBP lowered interest rate by 150 basis points to 10.5 percent in August 2012.
In July-April, average CPI inflation was recorded at 7 percent compared to 3.77 percent in the corresponding period of 2017/18 and 4.09 percent in the similar period of 2016/17.
PBS said the wholesale price index for April 2019 increased 2.33 percent over March, 2019. It increased 13.81 percent over the corresponding month of the last year.
Core inflation measured by non-food non-energy CPI increased 7 percent year-on-year in April 2019 as compared to an increase of 8.5 percent in the previous month and 7 percent in April 2018.
On month-on-month basis, it increased by one percent in April 2019 as compared to an increase of 0.5 percent in previous month, and an increase of 2.5 percent in the corresponding month of last year.