ISLAMABAD - Inflation has slowed down to 3.2 percent during March despite continuous increase in petroleum products prices.

Inflation measured by Consumer Price Index (CPI) has recorded at 3.2 percent during March over a year ago, according to Pakistan Bureau of Statistics (PBS).

It was the third consecutive month when the CPI pace slowed down after the State Bank of Pakistan increased its key policy rate by 25 basis points two months ago.

However, the SBP in its recent monetary policy kept the interest rate unchanged at 6 percent. The SBP has noted that sticky core inflation along with a moderate outlook of food prices amid abundant grain stocks and the recent increase in policy rate are expected to contain average inflation well below the fiscal year (FY18)'s target of 6 percent and close to it for FY19.

This assessment takes into account the lagged impact of exchange rate flexibility and its second round effects (specifically through adjustments in fuel prices), demand pressures, and volatile global oil prices.

Similarly, the government has recently depreciated the rupee against dollar, which will fuel the inflation rate in the months to come. On month-on-month basis, inflation increased by 0.3 percent in March 2018 as compared to a decrease of 0.3 percent in the previous month.

Meanwhile, core inflation measured by non-food non-energy CPI (Core NFNE) increased by 5.8 percent on annual basis in March 2018 as compared to an increase of 5.2 percent in the previous month and 5.3 percent in March 2017.

According to PBS, the CPI-based inflation was recorded at 3.78 percent during first nine months (July-March) of the current fiscal year. The Sensitive Price Indicator (SPI), which gauges rates of kitchen items on weekly basis, increased by 0.96 percent.

Similarly, the wholesale price index (WPI) based inflation enhanced by 2.7 percent in the period under review.

The break-up of inflation of 3.25 percent showed that food and non-alcoholic beverages prices increased by 0.99 percent. Similarly, health and education charges went up by 4.76 percent and 17.6 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 4.25 percent in last the month.

Meanwhile, the prices of alcoholic beverages and tobacco went down by around 16.89 percent.

Price of clothing and footwear increased by 4.84 percent and furnishing and household equipment maintenance charges 4.49 percent.

Recreational charges and those related to culture went up by 1.64 percent in the period under review, while amounts charged by restaurants and hotels by 6.21 percent in March 2018 as compared to the same month last year.

In food commodities, price of betel leaves and nuts increased by 22.25 percent, fresh fruits prices enhanced by 6.65 percent and chicken price went up by 4.39 percent during March as compared to the month of February.

In non-food commodities, price of newspapers increased by 8.9 percent, kerosene oil price enhanced by 5.42 percent, education charges went up by 4.89 percent, motor vehicles 3.14 percent and motor fuel 2.26 percent.

According to the PBS figures, price of tomatoes decreased by 20.06 percent, onions 19.16 percent, potatoes 8.53 percent, fresh vegetables 7.33 percent, eggs 7.26 percent and pulses prices also recorded decline during April over March.