[dropcap]R[/dropcap]ising international oil and other commodity prices remains a concern. These prices are predicted to move in upward direction, which would be affecting local inflation especially in Pakistan. However, given the rise in agriculture production and enough food supplies, stable exchange rate, effectual monetary policy, inflation is predicted to remain below the target of this fiscal year.
Presently, the Government of Pakistan mentioned in its report that CPI (consumer price index) inflation general rose by 3.9 percent on year-on-year (YoY) basis in September 2017 as against to a rise of 3.4 percent in the last month and 3.9 percent in September 2016. On month-on-month (MoM) basis, it grew by 0.6 percent in September 2017 as against to a rise of 0.2 percent in the last month and grow of 0.2 percent in September 2016. Core inflation measured by non-food non-energy CPI (Core NFNE) rose by 5.4 percent on YoY basis in September 2017 as against to a rise of 5.5 percent in the last month and 4.8 percent in September 2016. On MoM basis, it rose by 0.1 percent in September 2017 as against to rise of 0.1 percent in last month, and a rise of 0.3 percent in the same month of previous year i.e. September 2016. Core inflation, measured by 20 percent weighted trimmed mean CPI (Core Trimmed) rose by 4.1 percent on YoY basis in September 2017 as against to 4.2 percent in the last month and by 3.7 percent in September 2016. On MoM basis, it rose by 0.1 percent in September 2017 as against to a rise of 0.1 percent in the last month and a rise of 0.1 percent in the same month of previous year i.e. September 2016. Sensitive Price Index (SPI) inflation on YoY rose by 1.9 percent in September 2017 as against to a fall of 0.1 percent a month earlier and a rise of 1.8 percent in September 2016. On MoM basis, it grew by 2.1 percent in September 2017 as against to a rise of 0.5 percent a month earlier and a rise of 0.1 percent in September 2016.
Whole Price Index (WPI) inflation on YoY basis grew by 1.6 percent in September 2017 as against to a rise of 1.0 percent a month earlier and a rise of 3.4 percent in September 2016. WPI inflation on MoM basis grew by 0.1 percent in September 2017 as against to a fall of 0.3 percent a month earlier and a fall of 0.5 percent in the same month of previous year i.e. September 2016.
The government officials also revealed that the year (FY2016-17) begun with inflation at 4.1 (CPI) in July, it lowered down to 3.6 percent in August but then jumped to 3.9 percent in September. Thus Q1 FY2017 recorded average inflation at 3.9 percent as against to 1.7 percent of Q1 FY2016. The growing trend in Q1 FY2017 as against to Q1 FY 2016 is chiefly attributed to pick up in the prices of mash pulse 42.43 percent, gram pulse 41.04 percent, potatoes 31.56 percent and tomatoes 21.08 percent.
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During Q2 FY2017 the CPI recorded at 4.2 percent in October 2016, 3.8 percent in November 2016 and 3.7 percent in December 2016. YoY inflation scaled down during all three months of Q2 FY2017.
As a consequence average inflation for Q2 FY2017 stood at same level of Q1 at 3.9 percent, but stayed high as against to Q2 FY2016 which was 2.5 percent. This was because of rise in prices of gram pulse 37.09 percent, sugar 15.79 percent, eggs 17.64 percent and cigarettes 15.35 percent. With respect to headline inflation during Q3 FY2017, the CPI registered at 3.7 percent in January 2017, 4.2 percent in February 2017 and 4.9 percent in March 2017. Thus Q3 FY 2017 CPI stayed on average at 4.3 percent as against to 3.8 percent in Q3 FY 2016. This was on account of rise increase in prices of commodities such as potatoes 33.06 percent, tomatoes 31.91 percent, health 14.24 percent, fresh vegetable 14.17 percent, fresh fruits 11.00 percent and house rent 6.62 percent.
The experts also calculated that during first month of Q4 FY 2017 it grew to 4.8 percent in April 2017. However, on average during July-April FY 2017 it was registered at 4.1 percent as against to 2.8 percent in July-April FY2016 and 4.8 percent FY2015. Furthermore SPI stayed at 1.5 percent during July-April FY2017 as against to 1.4 percent FY2016 and 1.9 percent in FY2015. Moreover WPI was registered at 4.0 percent in FY2017 as against to (-) 1.3 percent in FY 2016 and 0.03 percent in FY 2015.