Karachi, June 01, 2020: As per the Pakistan Bureau of Statistics (PBS), CPI for the month of May’20 clocked-in at 8.22 percent YoY (in line with expectations) compared to 8.38 percent YoY in May’19 and 8.53 percent in Apr’20, respectively.
According to Arif Habib Securities, this took the 11MFY20 average inflation to 10.94 percent against 6.69 percent during 11MFY19. During the period under review, increase in monthly headline inflation was primarily led by Food Index (+1.6 percent MoM) and Clothing & Footwear index (+1.4 percent MoM) due to enforcement of smart lockdown and Ramadan increased demand of essential food items like Chicken, Potatoes, Fresh Fruits, and Milk which increased by 41 percent, 31 percent, 10 percent, and 5 percent MoM, respectively.
However, massive reduction in prices of petroleum products by PKR 15/liter along with significant decline in perishable food items and Liquefied Hydrocarbon prices kept the inflation restrained.
Uptick in CPI reading stems from Alcoholic Beverages, Food, Miscellaneous, and Clothing & Footwear, depicting an increase of 19.6 percent, 12.5 percent, 11.8 percent, and 10.9 percent YoY, respectively. Commodities that led the inflationary trend include Potatoes (+97 percent YoY), Pulse Moong (+83 percent YoY), Pulse Mash (+57 percent YoY), Gas (+55 percent YoY), Pulse Masoor (+40 percent YoY), Butter (+37 percent YoY), and Beans (+31 percent YoY).
On a MoM basis, inflation increased by 0.32 percent in May’20 compared to decline of 0.8 percent in Apr’20 and +0.60 percent in May’19. This took average monthly inflation to +0.68 percent in 11MFY20 compared to +0.66 percent in 11MFY19. Inflationary pressure eased off owing to Transport index (-6.5 percent MoM) which wiped off the impact of higher food prices.