Inflation rockets to 13.5-year peak of 21.3pc in June due to higher fuel cost

ISLAMABAD – Inflation has ballooned to a 13.5 years high of 21.3 percent in June this year mainly due to higher fuel cost, which increased the prices of all food as well as other commodities in the country.
Inflation measured through Consumer Price Index (CPI) was recorded at 21.3 percent in June 2022—highest after December 2008 when it was recorded at 23.3 percent. On month-on-month basis, it has increased by 6.3 percent in June 2022 as compared to preceding month of May, according to the latest data of Pakistan Bureau of Statistics (PBS). The CPI inflation Urban increased by 19.8 percent on year-on-year basis in June 2022. Meanwhile, CPI inflation Rural increased by 23.6% on year-on-year basis in June 2022.
In fiscal year 2021-22, inflation rate has gone beyond the target of eight percent by reaching at 12.15 percent. The Sensitive Price Index (SPI), which gauges rates of kitchen items on weekly basis, increased by 17.10 percent. Similarly, the WPI based inflation enhanced by 24.91 percent in the fiscal year that ended on June 30. On monthly basis, Wholesale Price Index (WPI) inflation on YoY basis increased by 38.9 percent in June 2022, which is highest ever in the country.
Inflation has even gone beyond ministry of finance’s projections. In its monthly report, the ministry of finance had projected that inflation rate would further accelerate within range of 14.5 -15.5 percent in June due to both external and internal factors. However, it was recorded at 21.3 percent in June. The ministry noted that the recent rise in international commodity prices especially energy and food, will also be translated into domestic prices.
Inflation is increasing mainly due to the government’s decision to continuously increasing oil prices in the country to fulfill the conditions of the International Monetary Fund (IMF). In a span of less than five weeks, the coalition government has increased the petroleum products prices up to Rs132.39 per liter to withdraw subsidies and imposing of petroleum levy. Petrol price has increased by Rs99.32 per liter and high speed diesel price by Rs132.39 per liter from May 27 to June 30.
Meanwhile, the government is also planning to enhance electricity and gas prices, which would further increase the inflation rate. The break-up of inflation of 21.32 percent showed that food and non-alcoholic beverages prices increased by 25.92 percent in June. Similarly, health and education charges went up by 11.30 percent and 9.46 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 13.48 percent in the last month. Meanwhile, the prices of alcoholic beverages and tobacco went up by around 17.60 percent.
Prices of clothing and footwear increased by 13.72 percent and furnishing and household equipment maintenance charges 18.76 percent. Recreational charges and those related to culture went up by 14.35 percent in the period under review, while amounts charged by restaurants and hotels by 21.85 percent in June 2022 as compared to the same month last year.
In urban areas, the food items which saw their prices increased during June 2022 included potatoes (34.64 percent), eggs (19.98 percent), pulse masoor (17.42 percent), mustard oil (17.39 percent), pulse gram (14.03 percent), gram whole (13.62 percent), wheat (13.03 percent), vegetable ghee (12.86 percent), rice (11.67 percent), besan (9.36 percent), tomatoes (9.03 percent), milk (8.18 percent), cooking oil (7.91 percent) and fruits (7.69 percent). In non-food commodities, prices of electricity went up 51.80 percent, motor fuel (37.13 percent), footwear (8.82 percent), stationery (8.29 percent), construction input items (5.26 percent), motor vehicle accessories (4.40 percent), plastic products (3.87 percent), washing soap/detergents/match box (3.80 percent) and carpets (3.03 percent).
In urban areas, prices of following items reduced including chicken (7.83 percent), wheat flour (3.76 percent) and vegetables (3.54 percent).
In rural areas, prices of following commodities increased including tomatoes (27.70 percent), potatoes (25.85 percent), eggs (19.96 percent), cooking oil (18.27 percent), vegetable ghee (17.16 percent), pulse masoor (14.47 percent), mustard oil (13.24 percent), gram whole (11.75 percent), pulse gram (11.14 percent), wheat (9.83 percent), rice (9.75 percent), onions (8.75 percent), besan (8.36 percent), milk (7.19 percent), pulse mash (7.13 percent), pulse moong (5.14 percent) and sugar (2.30 percent).

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