June 2024 CPI Inflation Rises to 12.6% YoY, Driven by Housing and Food Costs

ISLAMABAD.

CPI inflation for June 2024 was recorded at 12.6% YoY, higher than expectations. After posting a 29-month low of 11.8% YoY in May 2024, YoY CPI in June 2024 rebounded due to: 1) the low base effect, and 2) a MoM increase of 0.5%.

After a consistent decline over the last two months, MoM inflation increased by 0.5%, mainly due to increases in the housing and food indices, which were up by 1.5% MoM and 0.1% MoM, respectively.World Bank to provide $1.3b for agriculture, housing, emergency

The food index increased by 0.1% MoM in June compared to a sharp decline of 7.8% MoM in May, owing to weak demand and improved food supply. Within the food index, notable increases were witnessed in the prices of tomatoes, onions, and pulse gram, which were up by 39%, 21%, and 10%, respectively, while the price of wheat decreased by 8% during the month.

Additionally, the housing index increased sharply by 1.5% MoM due to higher electricity charges, which were up by 8% MoM. Conversely, the transport index declined by 2.2% MoM due to a decline in fuel prices during June, mainly driven by declining international oil prices. Urban core inflation was recorded at 12.2% YoY compared to 12.3% YoY last month, while rural core inflation was recorded at 17% YoY in June.

On a YoY basis, the major increase was seen in the housing index, up by 35.3%, mainly led by higher electricity charges, up by 66%, followed by health and miscellaneous, up by 19.83% and 14.38%, respectively. However, food prices remained at par with the prices of last year.

During FY24, average CPI stood at 23.9%, lower than 29% last year but higher than the last five-year average CPI of 17%.