The inflation rate has surged up to 9 per cent in September 2021 due to the consistent increase in prices of food commodities, fuels, and electricity battering government and market expectations for a moderate inflationary pace.
Prices of those commodities that have a direct impact on the household and domestic life of people increased more even as the government kept on defending itself by quoting prices of goods in other countries in the weakening Pakistan currency.
The Pakistan Bureau of Statistics (PBS) reported on Friday that the inflation rate based on the Consumer Price Index (CPI) rose for the third successive month reaching the 9% mark in September which is the highest inflation rate of the three months.
The Ministry of Finance and market surveys predicted around an 8.4% inflation rate for September. The month-on-month inflation rate spiked to 2.1% in September over August which is the highest of the last 15 months.
Inflation accelerated to 9.1% in urban areas and to 8.8% in villages, according to the PBS survey. Food inflation spiralled in cities to 10.8% whereas in villages and towns it remained at the previous level of 9.1%.
PBS reported a nearly 45% increase in prices of chicken, around 40% rise in cooking oil, one-third increase in egg rates and nearly 20% increase in prices of wheat flour in September as compared to the corresponding month a year ago.
In a month to month analysis, wheat flour prices rose 10% despite the promise of Finance Minister Shaukat Tarin to bring prices down to Rs55 per kg. There was seen around a 15% increase in sugar prices.
Prices of essential food items have been increasing in double digits for a long time despite the clear focus of Prime Minister Imran Khan to curb the increase.
The food group saw an almost double-digit increase in prices in September compared to the same month of the previous year.
The inflation rate for the housing, water, electricity, gas and fuel group increased to 8.9% last month.
PBS data noted that the prices of non-perishable food items rose 11.1% on an annualised basis and prices of perishable goods inched up to 15.3%.
The surge came amid a sharp fall in the value of the rupee in three months to Rs170.6 to a dollar on Friday. On May 3, the rupee had traded at Rs153.36 to a dollar, which lost Rs17.2, or 11% of its value, in just four months.
The reduction in the rupee value is pushing up the cost of every imported commodity including wheat, sugar, cooking oil, crude oil and raw material for industries.
Tarin on Friday said that petrol prices in Pakistan were cheaper than the rest of the region and the world, adding that only 16 countries had lower prices – all of them being oil producers themselves.
He converted these prices into Pakistani currency. If calculated in Indian rupee-dollar parity, the per litre petrol price in Pakistan is $1.73 which is the highest in the region when compared to $1.4 per litre in India and $1.2 in Bangladesh.
Similarly, Pakistan’s per capita income is $1,540, which in India is $1,947 and in Bangladesh, it is $2,100.
Finance Minister Shaukat Tarin said that prices of other essential items were increased all over the world due to the Covid-19 pandemic.
He said, “We have been affected by that as well because we have become a food importer. We did not become a food importer in only three years but we have been facing the consequences of inadequacies in the agriculture sector for the last 30 years.”
Average prices for clothing and footwear, and transportation groups rose as much as 10% in September. In the non-food group, the prices of liquefied hydrocarbons increased nearly 54%, electricity 22.3% and petrol 17.6%.
The average inflation rate for the July-September period increased to 8.6% – slightly above the target. The average inflation rate in urban areas was 8.7% and in rural areas, it was 8.4%.
