Inflation rose to 8.2pc in February
ISLAMABAD: The country’s inflation widened to 8.2 per cent year-on-year in February, influenced by faster rupee depreciation and demand pressure, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.
As a result, inflation has crossed the four-year high of 6.78pc recorded in October last year — the period when global oil prices started increasing, undermining earlier gains. The inflation resurged over the past couple of months owing to an increase in prices of fresh vegetables and fruits in major urban centres. The average inflation during the July-February period rose by 6.46pc on a yearly basis.
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The government has projected 6pc annual inflation for the fiscal year 2018-19, but this figure has already crossed in February this year. The average inflation was 3.92pc in FY18 and 4.16pc the year before.
Tightening of the monetary policy by the State Bank of Pakistan (SBP) has come on the back of the rising inflation amid depreciating rupee and high global crude prices over the past two years. Policy rates are already at their six-year high after the SBP raised the key rate by 25 basis points to 10.25pc on Jan 31 this year. The central bank has raised the interest rate by 4.50pc since January last year.
The most dominating push to inflation came from non-food-non-energy (core inflation) component which typically represents the underlying demand pressures on the economy. The core inflation, measured by excluding volatile food and energy prices, was recorded at 8.8pc year-on-year. It has been steadily rising for a couple of months despite tightening of the monetary policy.