The Consumer Price Index (CPI) inflation in the country is on a declining path since November 13 when it had peaked to the 17-month high of 10.9 percent year-on-year (YoY).
During Jan-13, the economic observers expected the index to further ease off to down to 7.7 percent. The average CPI for the 7MFY14 is likely to clock in at 8.7 percent YoY and 8.3 percent in 7MFY13, the analysts said. On a monthly basis, the CPI is expected to stand at 0.25pc MoM compared to -1.32 percent of last month. Abdul Azeem of InvestCap Research tends to attribute the rise in CPI during the said period to increase in chicken prices by 22 percent and house rent by 1.25 percent during the month of Jan-14.
However, he said, prices of perishable food items remained on downward trajectory as potatoes, tomatoes and onion were to register a decline of 33 percent, 28 percent and 26 percent during Jan-14. During the month of Jan-14, the combined SPI trend remained on the declining path as the same posted a decline of 0.23%MoM. “The current downward trend in CPI coupled with stable PKR against USD is expected to maintain the DR at current levels,” viewed Azeem.
The analyst said that by assuming the monthly CPI at 0.80 percent for the remaining period of FY14, the highest CPI comes at 9.40 percent in Jun-14. “Therefore we don’t foresee any rise in SBP discount rate in the Monetary Policy Statement due in Mar-14,” said he.
