consumer price index Archives

CPI inflation clocks in at 6.9pc for September, marking…

1 October 2024
by admin

Pakistan’s consumer price index (CPI) in September clocked in at 6.9 per cent year-on-year (YoY), data from the Pakistan Bureau of Statistics (PBS) showed on Tuesday, which is well within the central bank’s target of 5 to 7pc for next year.

The State Bank of Pakistan (SBP) had held off on aggressive monetary easing in order to achieve the goal of bringing inflation down to the medium-term target of 5 to 7pc in September 2025 and ensure macroeconomic stability.

On a month-on-month (MoM) basis, the PBS noted that it had decreased by 0.5pc in September as compared to an increase of 0.4pc in the previous month.

The CPI measures household inflation and includes statistics about price change for categories of household expenditure.

Mohammed Sohail, chief executive of Topline Securities, attributed the ease in inflation to “aggressive monetary tightening”.

He said, “SBP has achieved bringing inflation below 7pc one year ahead of target.”

In August, inflation had risen 9.6pc year-on-year (YoY), marking a 34-month low.

Prime Minister Shehbaz Sharif had expressed satisfaction over the single-digit inflation rate, attributing the achievement to the hard work of the government’s economic team.

Meanwhile, the finance minister had noted that inflation was down to single digits and was going to “subside more”, adding that happened on the back of the successful completion of the stand-by agreement with the International Monetary Fund (IMF).

Year-on-year

Urban:

Food item prices that increased included: Onions (78pc), Pulse Gram (56.98pc), Besan (47.53pc), Fish (29.85pc), Fresh Vegetables (29.17pc), Milk Powder (21.09pc) and Chicken (21.08pc).

Non-food items prices that increased: Gas Charges (318.74pc), Motor Vehicle Tax (168.79pc), Dental Services (29.47pc), and Cotton Cloth (19.63pc).

Rural

Food item prices that increased included: Onions (89.74pc), Pulse Gram (48.05pc), Besan (39.23pc), Milk Powder (26.07pc), Beans (24.29pc), and Meat (23.27pc).

Non-food items that increased: Motor Vehicle Tax (126.61pc), Education (22.73pc), Personal Effects (22.05pc), Cotton Cloth (19.19pc), and Communication Services (18.70pc).

Month-on-month

Urban:

Food item prices that increased included: : Besan (14.67pc), Pulse Gram (13.48pc), Eggs (7.33pc), Gram Whole (4.98pc), Onions (4.94pc) and Condiments and Spices (3.32pc)

Non-food items prices that increased: Electrical Appliances for Personal (3.02pc), Dental Services (3.01pc), Postal Services (2.48pc), and Newspapers (2.39pc).

Rural

Food item prices that increased included: Besan (14.40pc), Onions (12.75pc), Pulse Gram (10.12pc), Eggs (8.54pc), Gram Whole (4.54pc), and Meat (3.74pc).

Non-food items that increased: Water Supply (5.19pc), Personal Effects (2.68pc), Dental Services (2.38pc) and Construction Input Items (1.88pc).

Science & Environment

July CPI inflation sees sharp decline to 3.54%; lowest…

12 August 2024
by admin

July 2024 CPI inflation: The Consumer Price Index (CPI) inflation for the month of July eased sharply to 3.54%. This is the lowest retail inflation in 59 months or nearly 5 years according to the Ministry of Statistics data released today.
According to MoSPI data, the provisional inflation rate stands at 3.54% for the entire country, with rural areas experiencing a higher rate of 4.10% compared to 2.98% in urban regions.
Moreover, the All India Consumer Food Price Index (CFPI) reveals that food inflation in July 2024 has reached its lowest level since June 2023. The provisional year-on-year food inflation rate is 5.42% nationwide, with rural areas at 5.89% and urban areas at 4.63%.
In July 2024, all groups witnessed a reduction in inflation rates, with notable decreases observed in the vegetables, fruits, and spices subgroups.

Inflation Trend

In its monetary policy review last week, the RBI had said, “A degree of relief in food inflation is expected from the pick-up in the south-west monsoon and healthy progress in sowing. Buffer stocks of cereals continue to be above the norms. Global food prices showed signs of easing in July, after registering increases since March 2024.”
“Assuming a normal monsoon, and taking into account the 4.9 per cent inflation print in Q1, CPI inflation for 2024-25 is projected at 4.5 per cent, with Q2 at 4.4 per cent; Q3 at 4.7 per cent; and Q4 at 4.3 per cent. CPI inflation for Q1:2025-26 is projected at 4.4 per cent. The risks are evenly balanced,” RBI governor Shaktikanta Das had said.
The latest inflation data would come as a relief for the central bank which has a target of keeping the CPI inflation close to the 4% mark with a range of 2-6%. The data may also boost hopes of a early rate cut from the RBI-led Monetary Policy Committee in its next meet.

Science & Environment

Govt considering major cut to food weighting in new…

7 August 2024
by admin

An Indian government panel tasked with revising the nation’s consumer price index is considering a substantial cut in the weighting of food, according to a person familiar with the matter, a move that could curb inflation spikes in the South Asian nation.
The panel, under the statistics ministry, is discussing a proposal to reduce the weight of food in the consumer price basket by as much as 8 percentage points, according to the person, who asked not to be identified as the discussions are private.The food and beverage category makes up 54.2% of the current CPI basket.
The CPI is currently based on consumer spending patterns surveyed in 2011-2012, which economists say are outdated and may be distorting the official inflation data the central bank uses to set interest rates. More recent surveys show consumers are spending less of their budget on food than they did a decade ago. Bloomberg Economics estimates inflation in June was 70 basis points higher than it would have been using new weights.
A spokesman for the ministry of statistics and program Implementation didn’t immediately respond to an emailed request for further information.
The Reserve Bank of India has kept interest rates unchanged for more than a year, and stuck to a relatively hawkish stance given inflation is above its 4% target. Economists surveyed by Bloomberg predict the RBI will likely hold again on Thursday.
Food is a big driver of inflation in India given its high weighting in the CPI basket. In June, food prices rose 9.36% from a year earlier, pushing up the headline inflation rate to 5.08%. Excluding food and energy costs, inflation was 3.15%.
A revision of the CPI, which currently has some 299 items, would see redundant items such as horse cart fares, prices for video cassette recorders, and costs of audio and video cassettes likely weeded out of the calculation. The government panel is also discussing including consumer electronic products, such as smartphones in the updated index, the person said.
The changes to the CPI weights and the base year, which are under consideration now, will likely only be implemented by January 2026. The revisions are based on results of new consumer spending surveys, which the statistics ministry is still finalizing. The entire process is expected to be completed sometime during 2025.
Chief Economic Adviser V Anantha Nageswaran, a top official in the ministry of finance, last month argued the central bank’s inflation target should exclude food. Several economists, however, said removing food from the CPI target wasn’t appropriate for a country like India.

Science & Environment

UK inflation holds at 2% but underlying price pressures…

17 July 2024
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British inflation held at 2.0 per cent last month, defying forecasts for a slight fall, and underlying price pressures persisted, maintaining uncertainty about the date of the Bank of England‘s first interest rate cut since 2020.
Economists polled by Reuters had mostly expected headline consumer price inflation would ease to 1.9per cent in the 12 months to June, extending its drop from a peak of 11.1per cent in October 2022.
Inflation for services was much stronger at 5.7 per cent, the Office for National Statistics said, unchanged from May. The Reuters poll had pointed to a slightly weaker 5.6per cent increase.
Sterling rose against the dollar immediately after the data was published.
The BoE – which has a target of consumer price inflation of 2 per cent – has expressed concern about the strength of services inflation, which largely reflects pressure from wage growth in a labour market short of candidates to fill jobs.
Data due on Thursday is expected to show wages growing slightly less strongly than in data published a month ago but still rising by almost 6per cent – roughly double the rate that would be compatible with keeping inflation at 2per cent.
The BoE is due to announce its next decision on interest rates on Aug. 1 and investors see a roughly 50per cent chance of a first cut to borrowing costs since 2020.
A rate cut next month would give an early boost to new Prime Minister Keir Starmer and his finance minister Rachel Reeves who have said they will speed up the slow-moving British economy after winning power in a landslide election two weeks ago.
But last week the BoE’s Chief Economist, Huw Pill, said he was focused on persistently strong price pressures and said the timing of the first rate cut was an open question.
Core inflation – excluding volatile food and energy prices – held at 3.5 per cent in the 12 months to June, the ONS said, matching the median forecast in the Reuters poll.
The BoE had expected headline inflation of 2.0 per cent in June and services inflation of 5.1per cent, according to forecasts it published two months ago. The BoE also expected headline inflation to rise back above its target later this year and through 2025.

Science & Environment

Retail inflation rises in June, justifying rate pause –…

12 July 2024
by admin

India’s inflation accelerated to a four-month high in June, justifying the central bank’s decision to keep interest rates higher for longer.
The consumer price index rose 5.08% from a year earlier, compared with 4.75% in May, the Statistics Ministry said Friday. That’s faster than the median forecast of a 4.80% increase predicted by economists in a Bloomberg survey.
Governor Shaktikanta Das said on Thursday that inflation is moving very slowly towards the Reserve Bank of India’s 4% target and that it’s premature to discuss interest rate cuts.
The RBI has kept its policy rate unchanged at 6.5% for more than a year though economists are betting the central bank is getting close to pivoting. A consensus appears to be emerging among the external members of the monetary policy committee that high interest rates are impeding growth.
Food prices, which make up about half of the consumer price basket, climbed 9.36% from a year ago, compared to 8.69% in May. Core inflation, which excludes volatile food and energy costs, jumped to 3.15% in June from a year earlier, compared to 3.12% in May, according to calculations from Bloomberg Economics.
The monsoon, which irrigates half of the nation’s farmland, has covered the entire country, providing some relief to farmers. Sowing of monsoon crops like rice and pulses will gather momentum in the coming days.
“We expect the better sowing patterns and spatial distribution of rains to eventually ease the price pressures,” said Upasna Bhardwaj, chief economist of Kotak Mahindra Bank. However, the rise in prices means that the central bank will be in no hurry to ease monetary policy anytime soon, she said.
Other highlights from the CPI data:

Housing prices rose 2.69% from a year earlier, compared to 2.56% the previous month
Clothing and footwear costs remained steady at 2.73% in June from a year earlier, compared to 2.74% in May
Fuel and electricity costs fell 3.66% last month
Separately, factory output grew 5.9% in May, compared to 5% in the previous month

Science & Environment

4.8%: Retail inflation hits 11-month low – Times of…

13 May 2024
by admin

NEW DELHI: Retail inflation dipped to an 11-month low in April, led by deflation in fuel and light segment and softening pressures on clothing and footwear, pan, tobacco and intoxicants segments, but food and beverages inflation remained stubborn. Experts said continued uncertainty over food inflation dims the prospects of interest rate cuts for now.
Data by the National Statistical Office on Monday showed retail inflation, as measured by the consumer price index, rose an annual 4.8% in April, marginally slower than the 4.9% in March. Rural inflation was higher at 5.4% while urban was at 4.1%.
Inflation in the food and beverages group rose to 7.9% in April from 7.7% in March, led by higher prices in cereals, meat and fish, oils and fat and fruits. Inflation in the vegetables and pulses & products segment remained in double digits for 11 months in a row. Vegetables inflation rose an annual 27.8% in April, while pulses & products surged 16.8%.
Retail inflation had eased to a five-month low of 4.9% in March, slowing from 5.1% in Feb. It was led by marginally moderating food inflation.
RBI governor Shaktikanta Das has said that food inflation continues to exhibit considerable volatility impeding the disinflation.
“We fear that the food and beverages inflation will retrace above the 8% mark in May, partly on account of the adverse base (+3.3% in May 2023 Vs +4.2% in April 2023), as well as the above-normal temperatures and heatwave conditions during summers, which would push up the headline CPI inflation to a five-month high of 5.1-5.2% in the ongoing month,” said Aditi Nayar, chief economist at ratings agency ICRA. “With continued uncertainty, the chance of a stance change in the upcoming monetary policy review appears dim,” said Nayar.

Tag: <span>consumer price index</span>

CPI inflation clocks in at 6.9pc for September, marking…

July CPI inflation sees sharp decline to 3.54%; lowest…

Govt considering major cut to food weighting in new…

UK inflation holds at 2% but underlying price pressures…

Retail inflation rises in June, justifying rate pause –…

4.8%: Retail inflation hits 11-month low – Times of…