CPI slows to 22-month low of 20.7% in March

The consumer price index (CPI) for March 2024 clocked in at 20.7% YoY, compared to 23.1% YoY in the last month and 35.4% YoY in March 2023, the latest data issued by the Pakistan Bureau of Statistics (PBS) on Monday showed.

On a monthly basis, CPI rose 1.7% in March 2024 as compared to an increase of 0.03% in the previous month and an increase of 3.7% in March 2023.

The inflation figures came in hotter than the market's expectations.

Accordingly, this takes the average yearly inflation of 9MFY24 to 27.2% YoY, same as the figures from same period last year.

The average core inflation, measured by non-food non-energy, rose 15.7% YoY in March 2024 as compared to an increase of 18.0% YoY in the previous month and an increase of 20.4% YoY in March 2023.

On a monthly basis, average core CPI increased 0.4% in March 2024 as compared to an increase of 0.3% in the previous month and an increase of 2.5% in March 2023.

The monthly increase of 1.7% as compared to the last 12-month average of 1.75% was largely driven by the food index, which rose 2.91% MoM due to Ramadan.

Moreover, the house index rose 1.50% MoM amid an increase in electricity charges and LPG prices.

With the CPI-based inflation rate at 20.7% and the policy rate at 22.0%, the real interest rate has turned positive after more than three years, standing at 1.3%.