Tomato Prices Cause Inflation to Surge to 12.70% in November 2019

Pakistan’s consumer inflation, which is measured through the Consumer Price Index (CPI), surged to 12.70% compared to November 2018, based on the new base year (2015 16).

On an annual basis, it increased by 12.70% in November 2019 as compared to an increase of 11.0% in the previous month and 5.7% in November 2018. On a monthly basis, it increased by 1.3% in November 2019 as compared to an increase of 1.8% in the previous month and a decrease of 0.1% in November 2018.

According to the data released by the Pakistan Bureau of Statistics, the higher prices of food items have been the largest driver in overall inflation in November. The single major contributor was tomatoes. However, the prices of tomatoes have are falling now.

CPI National with base year (2015 16) for the month of November 2019 increased by 1.34% over October 2019. The urban CPI covers 35 cities and 356 consumer items, while the rural CPI tracks 27 rural centres and 244 items.

Going by the old base year of 2007 2008, that was being used until four months ago, the key inflation index comes in at 12.28% for November, showing a 1.20% increase over the month of October.

CPI Urban inflation increased by 12.1% on annual basis in November 2019 as compared to an increase of 10.9% in the previous month and 6.3% in November 2018. CPI Rural inflation increased by 13.6% on a yearly basis in November 2019 as compared to an increase of 11.3% in the previous month and 4.7% in November 2018.

According to different analysts, the jump in November inflation on rising food costs is a blow to the economy as a fast rise in consumer prices slowed economic growth this fiscal year. But the government is expecting inflation to drop by the end of December.

Average inflation measured by the Sensitive Price Index crawled up to 14.22% in July November from 1.99% during the same period last year.

Following are some of the commodities’ prices which saw an increase on a monthly basis:

Tomatoes by 149.41 percent

Pulse Maash by 11.72 percent

Pulse Moong, 7.79 percent

Wheat by 6.86 percent

Potatoes by 6.72 percent

Wheat flour by 4.74 percent

While the prices of following items witnessed a reduction on a month on month basis:

Fresh vegetables by 11.52 percent

Chicken by 2.28 percent

Sugar by 1.18 percent

Fresh fruits by 1.03 percent

In rural areas, these items witnessed an increase in prices:

Tomatoes by 189.67 percent

Onions by 13.83 percent

Wheat by 10.85 percent

Pulse moong by 8.55 percent

Beans by 6.24 percent

Wheat flour by 6.15 percent

The prices of the following non food items increased:

Woolen readymade garments by 3.62 percent

Woolen cloth by 3.15 percent

Construction wage rates by 1.08 percent.

While prices of the following items decreased:

Electricity charges

Governor State Bank of Pakistan, Reza Baqir, recently said that rising inflation has partly been the result of the need to restore competitiveness in the exchange rate, increased administered prices to reduce fiscal deficits in the public sector, and unforeseen food supply disruptions.

The State Bank of Pakistan had kept its benchmark interest rate unchanged at 13.25 percent in November, as expected, to further prevent food inflation.

Source: Pro Pakistani