Tomato Pushed Inflation to 4-year high level  

Karachi, March 4, 2019: As per the Pakistan Bureau of Statistics (PBS), CPI for the month of Feb’19 clocked-in at 8.21% YoY compared to 3.80% YoY in Feb’18 and 7.19% in Jan’19, respectively.

According to Arif Habib Limited Research report, this increase took the eight months of this fiscal year (8MFY19) average inflation to 6.46% against 3.84% during 8MFY18.

During the period under review, monthly headline inflation was primarily led by food index review (+1.56% MoM) due to rise in price of Tomatoes (+150% MoM) which added 40bps in overall CPI.

However, if we exclude seasonal hike in the price of Tomatoes, inflation would have been 7.81% YoY and 0.27% MoM. Albeit, inflation remained subdued on the back of decline in transport index by 0.38% MoM owed to meagre reduction in prices of petroleum products.

Uptick in consumer price index reading stems from Transport, Alcoholic Beverages, Housing, and Education, depicting an increase of 13.4%, 13.2%, 11.5%, and 10.2% YoY, respectively.

Commodities that led the inflationary trend included Tomatoes (+179.4%), Gas (+85.3%), Spices (+16.6%), Transport Service (+14.8%), Cigarettes (+14.6%), Motor Vehicles (+13.8%) and Motor Fuel (+13.8%). On the flip side, decline in prices of Onions (-32.8%), Betel nuts and leaves (-21.4%), Potatoes (-18.7%), Chicken (-11.0%) and Gram Whole (-6.8%) kept the inflation restrained.

On a MoM basis, inflation inched up by 0.64% in Feb’19 compared to Jan’19 inflation increase of 1.00%. This took average monthly inflation to 0.59% in 8MFY19. Rise in inflation was led by Food Index (having weight of ~34.8%) up by +1.56% MoM.

WPI reading stands at 11.03% YoY in Feb’19 compared to 9.88% YoY in Jan’19. This increase in WPI index is due to uptick in prices of Natural Gas Liquefied (+49.0%), Furnace Oil (+28.7%) and Motor Cycle (+26.3%). On the other hand, core inflation surged to 8.8% in Feb’19 compared to 8.7% in Jan’19.

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