Core inflation as well as headline inflation in the country declined during October 2006. Core inflation, measured as non-food non-energy (NFNE) was recorded at 5.7 percent and trimmed mean core inflation 6.4 percent compared with 7.8 and 7 percent, respectively, in October of last year.
According to State Bank of Pakistan''s monthly publication ''Inflation Monitor'', released on its website on Saturday. It says that headline inflation exhibited lesser growth of 8.1 percent in October 2006 compared with September. It was less than in October of last year.
Non-food inflation declined significantly to 6.4 percent in October 2006 - lowest level in last two years. In August and September 2006, it was recorded at 7.4 and 7 percent, respectively. Nonetheless, pressure on food inflation still exists, which is also evident from a considerably high rate of growth in SPI.
However, WPI continued its declining trend and came down to 6.7 percent during October 2006, says Inflation Monitor. A closer look at price movement of individual items included in CPI food group reveals that prices of 49 commodities, including fresh milk, beef, sugar, chicken, pulses gram, mash, moong, cooked mutton, honey, tomatoes, chillies green etc exhibited double digit inflation with a combined weight 52.4 percent in total food group.
On other hand, prices of 14 commodities, like apple, ginger, and pulse masoor declined in the month under review. The rest of items, having weight of 35 percent in food group, exhibited subdued or moderate inflation.
In non-food group, house rent index (HRI) maintained its declining trend, which started after February 2005, and recorded moderate increase of 6.9 percent in October 2006 compared with about 11.1 percent in corresponding month of last fiscal.
Inflation in fuel and lighting declined to 11.3 percent in October 2006 compared to 12.1 percent in preceding month. Most notable decline was recorded in transport and communication that already was showing continuous decrease since November 2006: Year-on-Year (YoY) inflation of 3.8 percent in October 2006 compared with 22.7 percent in same month of last fiscal year.
On the other hand, medicare registered a significant increase in prices with rate of 9.9 percent in the month under review compared with 1.6 percent growth in the same month of last year.
Wage inflation, that started declining from start of FY07, continued its decelerating trend in October 2006, resulting from lower wages of both skilled and unskilled workers on account of slow down in construction activities, the ''Inflation Monitor'' said.
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