The month of July augured well for the consumers in Pakistan who must have heaved in relief as the backbreaking price hike during the review month not only plunged to a single-digit but also hit the lowest level since December 2009.
According to available figures, the Consumer Price Index (CPI) inflation during July stood at 9.6 percent as against 11.26 percent of last month in June. “The reported CPI is the lowest since December 2009,” said the analysts at Topeline Research.
On monthly basis, the inflation stood at -0.3 percent compared to 0.04 percent of the previous month. This monthly inflation numbers, the analysts said, came in negative after six months.
“Though still awaiting the detail break-up, we believe the subdued number in the month of June is a reflection of decline in average petroleum prices and 18 percent decrease in consumer gas tariff effective from July 2012,” said Topeline analyst Nauman Khan.
Further, he said the Ramadan factor had not been incorporated in these inflation numbers. “These soft numbers attach a lower side bias to our average FY13 inflation forecast range of 10-11 percent,” he added.
The analyst said he was firm that the soft inflation numbers coupled with $ 1.2 billion disbursement by the United States under the long-withheld Coalition Support Fund would help the State Bank to reduce the discount rate by 50 basis points in the upcoming monetary policy decision.
Governor State Bank of Pakistan Yasin Anwar, however, had once, in an exclusive interview, told Pakistan Today that inflation numbers for a single month could never be a yardstick for making changes in the discount rate which is determined keeping in view the overall economic conditions.
