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Inflation hit nearly five months high in February

KARACHI: Inflation in the country continued to soar and has touched nearly five years’ high in February 2019.

Inflation soared by 8.21 in February 2019, driven up by a significant surge in the cost of living on almost every front, including higher utility bills, increased the cost of education and health care as well as a rise in transportation and communication expenses.

The Pakistan Bureau of Statistics (PBS) said the Consumer Price Index (CPI) accelerated to 8.21% in February 2019 compared to 3.8 percent in the same month of the previous year.

The State Bank of Pakistan (SBP) has let the rupee depreciate by a massive 32% since December 2017 to Rs138.53 to the US dollar on Friday in a bid to push up exports and control imports, which will shore up declining foreign currency reserves of the country and help manage the balance of payments deficit. This also has a delayed impact on prices of goods.

PBS reported that transportation services became expensive by 13.32% in February 2019 compared to a drop of 0.43% in prices in the same month of the previous year.

Alcoholic beverages and tobacco became expensive by 13.21% compared to just 0.46% in the corresponding month of previous year. Similarly, housing, water, electricity, gas and other fuels became costlier by 11.55% against just 0.01% earlier; education cost 10.21% more versus increase of 0.16% earlier; cost of furnishing and household equipment maintenance rose 9.24% compared to 1.21%; communication became expensive by 7.77% compared to 0.05% and health care cost 7.76% more compared to 0.46% in February 2018.

Other goods including clothing and footwear, food and non-alcoholic beverages and miscellaneous goods and services became expensive in the range of 4.52-9.87%.

It mentioned that prices of tomato, ginger, beef, sugar, tea (Lipton), mutton, gur, ghee (loose), fish, moong pulse, eggs, cooking oil, rice, gram pulse, gram whole (black), fresh milk and wheat increased in the range of 3.21-179.40%.

Average rate of inflation for first eight months (July-February) of current fiscal year came in at 6.46% where transportation (up 16.81%) and education (up 11.61%) were the two largest categories, the PBS reported.

Core inflation – the non-food and non-energy inflation – continued to pick up pace in February 2019. It grew at almost six-year high pace of 8.8% compared to 5.2% in February 2018, according to the PBS and tradingeconomics.com.

Core inflation has maintained the rising trend for the last nine consecutive months.

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