By Staff Reporter
ISLAMABAD: Inflation soared to 26.6 percent in October from a year earlier as food and energy prices spiraled, official figures revealed Tuesday, escalating the country’s cost-of-living crisis.
Food inflation quickened 36.2 percent year-on-year, while transport prices surged 53.4 percent, data from the Pakistan Bureau of Statistic showed. Clothing and footwear prices rose 18.3 percent and housing, water and electricity costs rose 11.9 percent.
“CPI inflation General, increased to 26.6 percent on a year-on-year basis in Oct 2022 as compared to an increase of 23.2 percent in the previous month and 9.2 percent in Oct 2021,” said the PBS.
Urban and rural inflation increased 24.57 percent and 29.53 percent year-on-year, respectively.
The inflation data comes as the country faces a looming food crisis after the catastrophic flooding in summer that washed away farmlands and standing crops. The country now requires more imports, adding pressure to its fragile finances. Vegetable and fruit prices have soared across the country. Rice and cotton crops were damaged along with vegetables like onions and tomatoes.
Analysts said the cost-of-living hit for households was being compounded by slow economic growth, as average pay is not keeping up with inflation and higher cost of doing business is forcing a number of firms to go for a pay freeze or rightsizing.
Monthly CPI inflation witnessed an uptick of 4.7 percent and analysts said the monthly uptick is a product of higher food and electricity prices.
Cumulatively, CPI averaged at 25.5 percent in the first four months of current fiscal year.
Analyst Khurram Schehzad said inflation in October has mainly been driven by food inflation that came at a massive 36 percent, where non-perishable food item inflation came at 31 percent and perishable food item inflation came at over 70 percent.
Food inflation was up by 5.6 percent month-on-month on notable price increases in onions (+68 percent), tomatoes (+41 percent), fruits (+11 percent), vegetables (+10 percent), and wheat (+9percent).
“Higher food prices have been a product of surging domestic fuel prices, and wide-scale floods, resulting in supply constraints, brokerage KASB Research said in a note.
The housing index rose by 10.9 percent month-on-month because of the 90 percent month-on-month increase in electricity charges. “October 2022 saw the reversal of electricity subsidies and caused average electricity charges to surge to Rs6.57/unit (against Rs3.47/unit in the previous month).”
The brokerage said the flood-driven constraints will keep food prices on the higher side, keeping the CPI inflation upward sticky. “Moreover, despite easing international oil prices, domestic fuel rates remain unchanged through a sharp increase in petroleum levy. Given these factors, we estimate CPI inflation to average around 22-23 percent in FY23.”
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