Karachi: Inflation in Pakistan showed signs of easing in October, as the annual rate decreased to 9.6 percent from 10.3 percent in September, according to data from the Pakistan Bureau of Statistics. Despite this moderation, rising food and fuel prices continue to exert pressure on households and industries, according to Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum (PBIF) and other business associations.
According to Pakistan Businessmen and Intellectuals Forum, consumer prices rose by 1.1 percent compared to the previous month, and inflation averaged 10.05 percent for the first four months of the fiscal year, compared to 4.79 percent during the same period last year. The increase in prices of essentials like wheat flour and petroleum products continues to diminish the purchasing power of households with limited incomes.
The report highlights that core inflation, which excludes volatile food and energy prices, eased to 7.8 percent in urban areas and 7.1 percent in rural areas. However, inflation as measured by the Sensitive Price Indicator increased from 8.4 to 8.7 percent, indicating ongoing pressure on necessities for salaried and low-income households.
Food and beverage prices, which rose by 2.26 percent in October, were particularly significant, accounting for a substantial portion of the monthly increase in consumer prices. Wheat flour prices rose significantly in both rural and urban areas, while chicken prices also saw a notable rise. These increases have a greater impact on rural areas, where food constitutes a larger share of household spending.
The report also noted a slowdown in monthly wholesale inflation, though annual wholesale inflation rose slightly. The cost of furnace oil, diesel, and wheat showed significant year-on-year increases, impacting transportation and manufacturing costs, particularly for small businesses that have less capacity to manage these expenses.
The ongoing US-Iran conflict has disrupted oil shipments through the Strait of Hormuz, resulting in higher energy costs globally, which affects importing nations like Pakistan. Mian Zahid Hussain commended government efforts to alleviate the burden but called for broader relief measures.
He urged the government to improve transparency regarding wheat stocks, enhance monitoring to prevent hoarding, and ensure timely supply to areas facing shortages. While the State Bank has raised the policy rate to contain inflation, the higher interest rates increase borrowing costs for businesses. Lasting price stability, according to Hussain, requires concerted actions against food hoarding, improved distribution, and reduced energy costs to safeguard purchasing power and maintain industrial operations.