Inflation Hits 20.68% in March, the lowest after 21 months
Staff Report
Pakistan’s CPI inflation clocked in at 20.68% YoY in March 2024 compared to 23.06% YoY recorded in Feb-2024. This came in line with expectations.
This is the lowest inflation after 21 months and it is down from a peak of 37.97% seen in May 2023.
On a MoM basis, CPI inflation was up 1.7% in Mar-2024 compared to flat in Feb-2024. This MoM rise in inflation is lower than the last 12 months’ average increase of 1.8%.
In 9MFY24 average inflation clocked in at 27.06% compared to 27.26% in 9MFY23.
Core inflation (NFNE) in Urban areas fell to 12.8% YoY in Mar-2024 vs 15.5% YoY witnessed last month.
Similarly, on MoM, inflation fell to 0.1% in March 2024 compared to 0.3% in Feb-2024.CPI Inflation is up 23.06% in February 2024
Core inflation (NFNE) in Rural areas fall to 20.0% in Mar-2024 vs 21.9% in Feb-2024. However, on a MoM basis, inflation increased by 0.8% vs 0.4% last month.
Food inflation in Mar 2024 is up 2.91% MoM. Food prices that have increased on a MoM basis include Tomatoes (+52%), Onions (+28%), Potatoes (+24%), Fresh Fruits (+22%), and Fresh Vegetables (+13%) among others.
However YoY uptick in food inflation was driven by an increase in the prices of Tomatoes (+188%), Onions (+84%), Fresh Vegetables (+55%), Condiments & Spices (+49%), and Gur (44%) among others.
Housing, Water & Electricity which contributes 24% to the CPI, rose by 36.60% YoY and 1.50% MoM in Mar-2024. The MoM rise is attributed to an increase in the monthly fuel charges adjustment in the electricity tariff.
Transport index which comprises fuel prices falls by 0.15% MoM while up 11.16% YoY in Mar-2024.
We anticipate CPI inflation in the coming months to fall below 20% primarily due to the high base effect of last year. Recent increases in petrol prices do not change our projections. We expect average inflation for FY24 to clock in at 25%.
