PRICE TRENDS DURING 2010-11
In 2010-11 fiscal years, an upward trend is persisted for all indices to measure multiple kind of inflation. Average CPI inflation is 14.1%, WPI inflation is 23.3% and SPI inflation is increased to 18.2% for July-Apr 2010-11 which is higher than the last year. The original factors for this spine are: increase in the international oil prices, textile products prices and unavailability of key consumer items in the market. Below table ravels average rates of inflation for three price indices:
CPI=Consumer Price Index
WPI=Wholesale Price Index
SPI=Sensitive Price Indicator
Trends of Inflation During July-April 2009-10 and 2010-11:
|
Items |
July-April |
|
|
2009-10 |
2010-11 |
|
| Consumer Price Index(CPI) (374 Items & 35 Cities) |
11.5 |
14.1 |
| Wholesale Price Index(WPI) (425 Items & 18 Cities) |
11.3 |
23.3 |
| Sensitive Price Indicator(SPI) (53 Items & 17 Cities) |
12.4 |
18.2 |
- Source: FBS (Federal Bureau of Statistics) in percent
INFLATION IN 2010-2011:
Inflation is measured by the changes in consumer price Index (CPI) increased by 14.1% in July-April 2010-11 as against 11.5% in the relative period of last year. During this period food is the major issue, with that flood fuel prices and food stuff prices had also affected the rate of inflation. Inflation of food has continuously increases and recorded at 18.4% as against 12.0% in the comparable period of last year. Non-food inflation will decrease in this period but it will over all affect the inflation with increase, recorded at 52.6%, where as food inflation accounted for 47.4% increase in CPI inflation. The analysis of CPI shows that food inflation worked as stimulant in the index with its 18.4% increase. Non-food groups are further divided into categorizes, the highest increase is in transport group with 16.5% followed by 14.9% in energy group, medicine 14.5% and textile has 11.7% increase. Another contributing factor is increase in the prices of crop sector/ agriculture sector. A part from these groups and factors there are many other factors and issues which will affect the increase in inflation rate of Pakistan. Due to unstable availability of food and other commodities the prices are increasing, other factors also include increase in crude oil prices, sugar prices. The issue of increase in prices is not only the problem of Pakistan but it is also faced by all other developing countries of world. Due to unavailability of food as well as non food items, most of the products are importing from other countries on high prices, to reduce the external affect of inflation, country need to increase the internal production of the country crops etc, but to reduce the affect of inflation no proper initiatives are taken, and still facing the problem of unavailability of food, to avoid unavailability issue, necessary item are importing from other countries. However, food imports comprises significant portion of imports as it account for 13.5% of imports in July-March 2010-11 and contributed 38% increase in imports. Pakistan has imported 1.02 million tons of sugar, 1.4 million tons of edible oil (palm oil), 0.5 million tons of pulses and 94.3 thousand tons of tea, by importing food items from other countries will continuously increase the inflation rate.
Annual CPI Inflation by Major Groups:
|
Commodity Group |
Weight |
(July-Apr) |
Point contribution |
||
|
(July-Apr) |
|||||
|
2009-10 |
2010-11 |
2009-10 |
2010-11 |
||
|
Percent |
Percent |
||||
| CPI |
100 |
11.5 |
14.1 |
11.5 |
14.1 |
| Food |
40.3 |
12.0 |
18.4 |
4.9 |
7.4 |
| Perishable |
5.14 |
14.5 |
35.1 |
0.7 |
1.8 |
| Non Perishable |
35.2 |
11.7 |
16.0 |
4.1 |
5.6 |
| Non-Food |
59.7 |
11.0 |
10.4 |
6.6 |
6.2 |
| Core * |
52.4 |
11.2 |
9.5 |
5.7 |
4.9 |
| Apparel, Textile |
6.1 |
5.8 |
11.7 |
0.4 |
0.7 |
| House Rent |
23.4 |
14.6 |
7.2 |
3.4 |
1.7 |
| Energy |
8.7 |
10.5 |
14.9 |
0.9 |
1.3 |
| Transport |
7.3 |
4.7 |
16.4 |
0.2 |
0.9 |
| Household |
3.3 |
6.4 |
9.9 |
0.2 |
0.3 |
| Recreation |
0.8 |
4.2 |
11.9 |
0.0 |
0.1 |
| Education |
3.5 |
6.0 |
6.0 |
0.5 |
0.2 |
| Cleaning |
5.9 |
11.5 |
11.5 |
0.6 |
0.7 |
| Medicare |
2.1 |
14.5 |
14.5 |
0.1 |
0.3 |
Increase in non-food inflation is mainly because of increase in global fuel prices, as well as impact of fuel and food inflation. Due to POL prices, it will affect on domestic prices, and through price adjustment in retail oil prices, electricity tariff and gas changes will also increase inflation rate. And it will also affect domestic cost of transportation, production and ultimately acceleration in inflation.
Change in price Indices energy related items:
| Non-Food Items | Weight | %Change | %Point Contribution |
| Kerosene | 0.14 | 13.2 | 0.0 |
| Electricity | 4.37 | 20.9 | 0.9 |
| Natural Gas | 2.05 | 8.5 | 0.2 |
| Petrol | 1.73 | 8.5 | 0.1 |
| Diesel | 0.21 | 14.6 | 0.0 |
| CNG. Filling charges | 0.16 | 9.8 | 0.0 |
| Total | 8.66 | 1.3 |
INFLATION BY INCOME GROUP:
The measure of inflation shows that inflation has great affect on poor, because their 50% of spending goes to food. Growing inflation prevalence for lowest income groups is 15.3%, which is highest prevalence amongst all income groups. While inflation is lowest for uppermost income group and it is far inferior then lowest group inflation at 13.6%.
Inflation Rate by Income Groups:
| Period | Overall CPI | Up to Rs.3,000 | Between Rs.3,001-5,000 | Between Rs.5,001-12,000 | Above Rs. 12,000 |
| 2006-07 | 7.7 | 8.3 | 8.3 | 8.0 | 7.7 |
| 2007-08 | 12.0 | 14.0 | 14.1 | 12.9 | 10.8 |
| 2008-09 | 20.8 | 22.4 | 22.1 | 21.6 | 19.5 |
| 2009-10 | 11.7 | 12.1 | 12.0 | 11.9 | 11.5 |
| 2009-10(Jul-Apr) | 11.5 | 11.9 | 11.8 | 11.7 | 11.2 |
| 20010-11(Jul-Apr) | 14.1 | 15.3 | 15.1 | 14.5 | 13.6 |
- Source: FBS
For further details and Queries please contact at: info@field-tab.com.pk
DISCLAMAR: The above statistics have been taken from Economic Survey 2010-11 for general interest of audience and no guarantee of data has been taken. This is not for profit service of IFT and IFT does not claim any responsibility for loss or profit made out of use of data presented here. IFT is not responsible for any direct or indirect damages related to the content of this page under any circumstances.
