CPI likely to settle at 10.29%YoY in Nov’21, experts estimate

Pakistan Bureau of Statistics is scheduled to announce the CPI figure on December 01, 2021, for Nov’21 wherein we expect CPI to settle at 10.29%YoY/1.84%MoM.

Soaring energy prices escalates Inflation

• On a monthly basis, CPI is likely to go up by 1.84%MoM during Nov’21 compared to the 1.9%MoM jump in Oct’21.
• The massive increase in transport, House Hold,and food items indices remained the major factors in surging CPI during Nov’21.
• The higher international commodities prices along with PKR depreciation make imports further costlier which fuels inflation.
• Moreover, the rise in the food items prices including tomatoes, Potatoes, Cooking oil, Milk, Meat and Egg prices are the main commodities expected to keep inflation elevated.

• On Yearly basis, the Consumer Price Index (CPI) is projected to clock in at 10.29%YoY for Nov’21, up by 1.09% as compared to 9.2%YoY in Oct’21. The housing index, H. hold equipment & house maintenance, Food index, and Clothing & Footwear would be the major among major segments to drive the inflation.

Outlook

• The upsurge in inflation is attributed to the higher fuel and food prices. Going forward, the government has to collect PKR600bn revenue through new taxes or elimination of tax relief as per IMF prior conditions. The increase in PDL by PKR4/litre each month up to PKR 30/litre along with increase in power tariff by PKR2/unit expected to lead further rise in inflation. Moreover, supply constraint caused by hoarding and smuggling to Afghanistan of food items would likely to keep inflation on higher side.

• The massive rise in agriculture inputs cost including fertilizer, pesticides and machinery also lifted cost of agri-products.

Courtesy – PBS, Spectrum Research

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