Prices of food items fell, but electricity charges increased
Pakistan recorded in August a lower inflation rate as compared to the rate for the last three months, revealed data recently published by the Pakistan Bureau of Statistics.
It was due to a reduction in prices of perishable food items such as fruits, vegetables, cotton seeds, eggs, and pulses, PBS said.
August’s inflation rate of 8.2% was 1.1% lower than the 9.3% inflation rate in the previous month.
The PBS calculates the inflation rate by measuring the prices of a basket of 480 common goods and services such as the cost of education, house rent, utility bills and food and beverages.
An increase in the inflation rate still means the prices of goods and services went up, but just at a lower rate.
The inflation in the outgoing month can be attributed to an 11.6% increase in the prices of electricity, which was due to fuel prices rising in August. Housing, water, electricity, gas and fuel prices have a weightage of 24% when calculating inflation so a change in its prices always has a major effect on inflation.
The price of spices and onions soared last month, mainly due to the celebration of Eidul Azha.
Rains in Karachi disturbed the supply chain of goods which led to a rise in the inflation rate.
It was a challenge for the Pakistan Tehreek-e-Insaf government to keep a check and balance on the prices of wheat and sugar in the last month. Despite Prime Minister Imran Khan’s interest in controlling the prices, they still increased, affecting the inflation rate.
“Inflation rate in the next month is expected to fall more to 8% according to the trend seen previously,” said Atif Zafar of Topline Securities.