Core inflation jumped to 8 percent in September 2018 which has been the highest in the past four years, said Consumer Price Index (CPI) data released by Pakistan Bureau of Statistic here on Monday.
Core inflation, which excludes volatile food and energy prices, went up from 7.7 percent in August to 8 percent in September. However, the headline inflation, measured by the CPI, eased to 5.1 percent in September. The key reason behind the slowdown was a 12.4 percent reduction in prices of perishable food items, showed the PBS inflation data.
The 8 percent core inflation is the highest in the past four years, as the last time when the core inflation stood above that level was in September 2014 when it stood at 8.1 percent.
According to the data, the cost of getting higher university education, especially masters in science (MSC), and engineering college fee have witnessed a significant increase, both in public and private sector, over the past one year.
Director Prices PBS, Attiq-ur-Rehman while addressing a press conference shared following details regarding the fluctuations in prices of various commodities.
According to PBS data on year-on-year basis, the fee for a masters program increased by 59 percent, while students in public sector engineering colleges will pay 40.91 percent additional fee and students in private medical colleges will pay 20.22 percent additional fee as compared to 2017.
The massive increase in the cost of education did not show up in overall price increases because education has only a 4 percent weight in the basket of common goods and services that the PBS uses to compute the prices of essential items an average household consumes every day.
According to PBS data, AC bus fares rose up by 45 percent, petrol price went up 30.5 percent and diesel became 38.5 percent expensive. Since transportation and fuel make up 36.5 percent of the overall Consumer Price Index (CPI) or basket of common goods and services, any increase in these prices can push the index up.
On year-on-year basis an increase in the prices of following items was witnessed: Dettol soap by 38.56 percent, diesel by 38.54 percent, kerosene oil by 37.34 percent, LPG cylinder by 33.12 percent, petrol by 30.56 percent, iron bar by 21.71 percent, compressed natural gas (CNG) by 14.54 percent and price of Suzuki car 1000cc by 14.47 percent.
Prices of following items witnessed a reduction on year-on-year basis: onion by 53.05 percent, garlic by 32.46 percent, pulse mash by 22.86 percent, potatoes by 19.58 percent, gram pulse whole by 12.45 percent, tomatoes by 9.83 percent, pulse Masoor by 9.15 percent, pulse Moong by 8.19 percent, eggs by 5.4 percent, pulse gram by 3.69 percent, Besan by 3.36 percent and sugar by 1.27 percent.
According to data on month-on-month basis during the period under review, prices of the following items witnessed an increase: public sector university fee for MSC by 15.36 percent, public sector medical college fee by 10.68 percent, liquefied petroleum gas (LPG) cylinder by 9.24 percent, bus fare by 7.90 percent, public sector engineering college fee by 6.39 percent, IT tuition fee by 5.32 percent, Dettol soap by 5.32 percent, private medical college fee by 5.29 percent, gold tezabi by 4.81 percent, silver tezabi by 3.92 percent, gram pulse by 2.87 percent, baby powdered milk Lactogen by 2.57 percent, cigarette by 2.06 percent and CAC 1000 1.51 percent.
The data said that on monthly basis the prices of following items witnessed a reduction: bananas by 12.91 percent, tomatoes by 12.03 percent, onion by 10.47 percent, air fare by 7.32 percent, chicken by 6.15 percent, apple by 5.10 percent, diesel by 5.06 percent, eggs by 2.81 percent, iron bar 1/2 inch by 2.72 percent, petrol by 1.98 percent, cement by 1.67 percent, gram whole by 1.54 percent, potatoes by 1.32 percent and sugar by 1.04 percent.
Besides an increase in international crude oil prices, which makes local oil more expensive, devaluation of rupee is another reason behind the current surge in the prices of various items in recent months, the director prices PBS said.
Since November 2017, prices have been on the rise due to devaluation of the rupee, which depreciated 22 percent in the same period. Since hitting a peak of Rs 130 against one US dollar in July, the rupee has recovered significantly to Rs 124 but international experts say the IMF may ask Pakistan to devalue the rupee even further if it seeks a bailout package to improve dwindling dollar reserves.
Any further depreciation of the rupee is likely to result in higher inflation in the coming months, especially because oil prices are already showing an upward trend.