KARACHI: Despite continued underlying pressures, Pakistan’s Consumer Price Index (CPI) for the general category fell to 4.1% year-on-year (YoY), down from 4.9% in November and a surprising 29.7 in December 2023. %.
However, monthly inflation rose marginally by 0.1 percent. While the drop from last year’s highs is notable, inflation is still above what would be considered comfortable for most economies.
A similar trend was seen in urban areas, with CPI inflation easing to 4.4% from 5.2% last month, compared to 30.9% in December 2023. can be cold.
Rural areas, while still facing higher inflation than their urban counterparts, also saw inflation decline to 3.6% year-on-year, down from 4.3% in November, but with a modest MoM increase of 0.3%. .
A broader measure of inflation, the Sensitive Price Index (SPI), also showed improvement, falling to 4.2% from 7.3% in November, although this was still a significant drop from 35.3% a year ago. On a MoM basis, SPI inflation rose by 0.8%, although this was still an improvement over the previous year, when SPI rose by 3.8%.
The Wholesale Price Index (WPI) continued its downward trend, falling to 1.9% YoY from 2.3% in November. This decline in wholesale inflation is likely to provide some relief to businesses and consumers in the coming months, although it was still a notable increase from the negative 27.3% recorded in December 2023.
Core inflation, measured by the core inflation measure, paints a more nuanced picture. Non-food, non-energy (NFNE) inflation, which provides a clear picture of inflationary pressures excluding volatile food and energy prices, declined in both urban and rural areas.
Urban core inflation eased to 8.1% annualized from 8.9% in November, but still well above comfort levels. Similarly, rural core inflation declined to 10.7 percent from 10.9 percent, though the figure is high by international standards. Both urban and rural core inflation registered an increase on a MoM basis, suggesting that underlying price pressures are not yet fully contained.
Trimmed average inflation, which excludes the most volatile prices, also showed signs of moderation. Urban-trimmed inflation eased to 6.2% from 7.5% in November, while rural-trimmed inflation eased to 6.5% from 7.8%. Again, the month-on-month changes indicate ongoing pressure with modest increases in both urban and rural areas.
The data shows that while inflation is down from last year’s highs, core inflation remains a concern, especially in rural areas.