High earning groups face lesser food inflation

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No matter which digit the inflation numbers are hitting, the price hike in the country is breaking the back of those earning the lowest among various income groups.

And those living in the federal capital, Islamabad, appeared to be most-affected compared to their countrymen residing in other provincial capitals of Pakistan.

Monitoring the monthly Consumer Price Index (CPI) inflation, the central bank found that during March, the daily-use food items remained highest to those having the lowest monthly income of up to Rs 8,000 in the country.

“The lowest income group (up to Rs 8, 000) has the highest inflation in food group during the month of March,” the State Bank observed.

Nisar Ahmed, a peon in a private firm, does not love to talk about inflation, which he says made life miserable for a commoner.

“Let’s not talk about Mehngai (inflation) sir. Running kitchen is not possible anymore for the people with lower income,” said Ahmed, who lives hand-to-mouth in a two-bedroom house with his four dependents in JunejoTown.

For Ahmed, gone are the days when people like him used to have a full-fledged lunch in a city restaurant for Rs 50 to Rs 60. “Now while at work in daytime, I prefer having two Samosas with a cup of tea to fulfill my hunger,” Ahmed said, who is married with a kid. Also, he has at home a widowed mother and a school-going brother that depend on him.

“I have to do a side business of scrap to make my sustenance sustainable,” Ahmed said, adding that transport fares, utility bills, education expenses of children and other essential expenditures made life miserable for the common man.

Ahmed’s sorry state can be substantiated with the official numbers for various categories of inflation for the income group he falls in.

Official data shows that for those earning up to Rs 8,000 a month, the rate of general, food and non-food inflation was 7.6, 7.1 and 8.4 percent in the previous month.

This is despite the fact that Ahmed’s city of residence, Karachi, was last month ranked the country’s fourth costliest city after Islamabad, Peshawar and Quetta. According to SBP’s inflation monitors, the inflation rate in Islamabad, Peshawar, Quetta and Karachi stood at 6.7, 5.9, 5.8 and 5.7 percent, respectively, during March.

Lahore, the provincial capital of Punjab, appeared to be the cheapest city with 5.4 percent year-on-year inflation.

Ironically, the price hike did not bother those officially categorised as the highest income groups.

“Income group above Rs 35,000 witnessed lower inflation than the overall inflation in CPI basket during March 2013 for general, food and non-food groups and lowest among the groups,” the central bank monitored.

For those earning the most the general, food and non-food inflation stood at 5.3, 6.0 and 5.0 percent, respectively, during the review month.

For those earning between Rs 8,001 and Rs 12,000, the price hike under the above three heads accounted for 8.4, 6.7 and 10.2 percent.

The group with an income ranging from Rs 12,001 to Rs 18,000 saw these figures at 8.0, 6.6 and 9.5 percent, while those pocketing Rs 18,001 to Rs 35,000 had to pay for daily essentials on the three accounts at a rate of 6.1, 6.3 and 5.9 percent.

Overall, the headline CPI inflation was recorded in March at 6.6 percent YoY compared to 10.8 percent of the corresponding month of last year.

“CPI Inflation on year-on-year basis in provincial capitals of Pakistan was lower than overall inflation during March 2013, while in the federal capital, it was slightly higher than overall inflation,” the State Bank said.