ISLAMABAD-Inflation eased down to 8.2 percent in the month of August despite increase in the prices of petroleum products in the last month.

Inflation measured through the Consumer Price Index (CPI) was recorded at 8.2 percent in August this year over the same period of last year, according to the latest data of Pakistan Bureau of Statistics (PBS). The inflation remained lower against the projection of Ministry of Finance, as it had estimated inflation would remain within a range of 8.4 to 9.7 percent in August 2020.

The ministry said that international food prices continued to remain fairly stable. On the other hand, in recent months, international price of oil tends to recover from recent lows and the USD/PKR exchange rate has been rising gradually.  Among additional factors affecting the inflation, the policy interest rate remained unchanged in July. Furthermore, some relief has been given to indirect taxes, not only to industry but also to consumption in the Federal Budget FY 2021. These factors may exert a tempering effect on inflation and inflation expectations.

Inflation has not increased despite the government had raised the prices of oil products during the last month. Prime Minister Imran Khan on Monday last had turned down the recommendation of increasing the prices of petroleum products for the month of September. He said that people are already facing high food inflation and need some reprieve, especially because of the heavy rains.

According to the latest PBS data, inflation has recorded at 8.74 percent in the first two months (July and August) of the current fiscal year. 

Meanwhile, the Sensitive Price Indicator (SPI), which gauges rates of kitchen items on weekly basis, increased by 12.74 percent. Similarly, the wholesale price index (WPI) based inflation enhanced by 3.24 percent in the period under review.

The break-up of inflation of 8.21 percent in August 2020 showed that food and non-alcoholic beverages prices increased by 12.89 percent. Similarly, health and education charges went up by 7.69 percent and 0.95 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 5.95 percent during the last month. Meanwhile, the prices of alcoholic beverages and tobacco went up by around 5.81 percent. Recreational charges and those related to culture went up by 3.49 percent in the period under review, while amounts charged by restaurants and hotels by 7.96 percent in August 2019 as compared to the same month of last year.

In urban areas, the food items which saw their price increased during August 2020 included: sugar (13.53 percent), wheat (11.95 percent), onions (10.4 percent), bakery and confectionary (6.65 percent), potatoes (5.85 percent), wheat flour (5.44 percent), beans (5.01 percent), milk fresh (4.79 percent), spices (2.81 percent), readymade food (2.22 percent) and rice (0.31 percent). In non-food, electricity charges up by (11.61 percent), transport services (5.41 percent), cleaning and laundering (4.47 percent), motor fuel (3.34 percent), construction wage rates (1.44 percent), medical tests (1.29 percent), and household equipments (1.12 percent).

Meanwhile, in urban areas, the commodities prices showed decline include chicken (36.45 percent), tomatoes (31.83 percent), fresh fruits (23.15 percent), pulse moong (6.5 percent), vegetables (2.78 percent), pulse mash (2.28 percent), fish (1.87percent), gram whole (1.78 percent), eggs (1.33 percent), pulse gram (1.29 percent), besan (1.21 percent), pulse masoor (0.98 percent), vegetable ghee (0.86 percent) and cooking oil (0.59 percent).

In rural areas, the food commodities which prices enhanced included sugar (13.31 percent), wheat (7.89 percent), wheat flour (4.36 percent), potatoes (3.73 percent), sweetmeat (2.63 percent), milk fresh (1.79 percent), rice (1.76 percent), eggs (1.43 percent), cigarettes (1.04 percent), readymade food (0.91 percent) and meat (0.74 percent).