CPI inflation restricted to 8.2 percent in May 2020

CPI inflation restricted to 8.2 percent in May 2020

KARACHI: National Consumer Price Index (NCPI) for the month of May’20 stood at (8.22%YoY) as compared to (8.5%YoY) in the previous month and (8.33%YoY) in the same period last year. Hence, average inflation during the11MFY20 now stands at 10.94% vs. 6.68% in SPLY.

On the (MoM) basis, Inflation increased by 0.32% owing to a higher food index which augmented by (+1.63%MoM), followed by Clothing (+1.4%). While the transport index declined by (6.45%MoM).

Inflation remained relatively under control in Ramadan due to a massive decline in fuel prices during April-May 2020.

“Our initial estimates suggest that the average National Consumer Price Index (NCPI) for the 1HFY21 stand at 5.5% triggering a positive real interest rate of 250bps. Therefore, we expect monetary easing to continue and more rate cuts would be seen 1HFY21,” a report issued by Pearl Securities said.

Drilling further to inflation, the Urban CPI recorded an increase of (7.27%YoY) while Rural CPI recorded an increase of (9.69%YoY).

Major commodities that witnessed an increase including Chicken (41.46%), Potatoes (31.19%), fruits (9.72%), Milk (4.63%), Cotton cloth (4.04%), Condiments and Spices (3.71%), Tailoring (2.53%), Motor vehicle accessories (1.51%), Meat (0.94%), and Construction input items (0.38%).Whereas, the decline was registered in Onions (23.35%), vegetables (19.62%), Eggs (18.74%), Motor fuel (13.43%), Tomatoes (7.74%), Pulse gram (7.25%), Pulse Masoor (4.43%), Besan (4.38%), Liquified Hydrocarbons (4.12%) and Wheat (3.37%).

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