Karachi, November 1, 2023 – Pakistan has experienced a significant contraction in headline inflation for the month of October 2023, with the Consumer Price Index (CPI) showing a decrease to 26.9 percent from the previous month’s 31.4 percent.
While this decline is a positive sign, it is worth noting that the inflation rate remains slightly higher when compared to October 2022, when it stood at 26.6 percent.
According to official data released on Wednesday, the CPI-based inflation, which reflects the general increase in consumer prices, decreased to 26.9 percent on a year-on-year basis in October 2023. This was a significant drop from the previous month’s 31.4 percent and a marginal increase from the same period last year when it was 26.6 percent.
On a month-on-month basis, the CPI inflation increased by 1.1 percent in October 2023, compared to an increase of 2.0 percent in the previous month and a notable decrease from the 4.7 percent recorded in October 2022.
Breaking down the inflation data further, the CPI inflation in urban areas increased to 25.5 percent on a year-on-year basis in October 2023. This was down from the previous month’s 29.7 percent but higher than the 24.6 percent recorded in October 2022. On a month-on-month basis, urban CPI inflation increased by 1.1 percent in October 2023, compared to 1.7 percent in the previous month and 4.5 percent in October 2022.
In rural areas, CPI inflation increased to 28.9 percent on a year-on-year basis in October 2023. This marked a decrease from the previous month’s 33.9 percent but was slightly higher than the 29.5 percent recorded in October 2022. On a month-on-month basis, rural CPI inflation increased by 1.1 percent in October 2023, compared to 2.5 percent in the previous month and 5.0 percent in October 2022.
The Sensitive Price Indicator (SPI) inflation on a year-on-year basis increased to 34.2 percent in October 2023, up from 32.0 percent in the previous month and significantly higher than the 24.0 percent recorded in October 2022. However, on a month-on-month basis, SPI inflation increased by a modest 0.2 percent in October 2023, compared to 1.7 percent in the previous month and a decrease of 1.5 percent in October 2022.
The Wholesale Price Index (WPI) inflation on a year-on-year basis increased to 24.6 percent in October 2023, down from 26.4 percent in the previous month and a notable decrease from the 32.6 percent recorded in October 2022. On a month-on-month basis, WPI inflation decreased by 1.9 percent in October 2023, compared to an increase of 3.1 percent in the previous month and a decrease of 0.5 percent in October 2022.
When measured by non-food non-energy components in urban areas, inflation increased to 18.5 percent on a year-on-year basis in October 2023. This was slightly lower than the 18.6 percent recorded in the previous month and higher than the 14.9 percent in October 2022. On a month-on-month basis, it increased by 1.2 percent in October 2023, compared to 1.0 percent in the previous month and 1.3 percent in October 2022.
In rural areas, inflation measured by non-food non-energy components increased to 26.7 percent on a year-on-year basis in October 2023. This marked a slight decrease from the previous month’s 27.3 percent but was significantly higher than the 18.2 percent recorded in October 2022. On a month-on-month basis, it increased by 1.0 percent in October 2023, compared to 2.6 percent in the previous month and 1.5 percent in October 2022.
The 20 percent weighted trimmed mean, used as a measure of core inflation, increased to 24.6 percent on a year-on-year basis in urban areas in October 2023. This was slightly lower than the 25.0 percent recorded in the previous month and higher than the 22.0 percent in October 2022. On a month-on-month basis, it increased by 0.6 percent in October 2023, compared to 1.1 percent in the previous month and 1.9 percent in October 2022.
In rural areas, the 20 percent weighted trimmed mean increased to 30.7 percent on a year-on-year basis in October 2023, which was lower than the 33.3 percent recorded in the previous month and higher than the 26.7 percent in October 2022. On a month-on-month basis, it increased by 0.8 percent in October 2023, compared to 1.7 percent in the previous month and 2.7 percent in October 2022.
The contraction in headline inflation in October 2023 is a positive development, indicating some relief from the high inflation rates seen in recent months. However, the persistence of inflation at such elevated levels remains a concern for policymakers, consumers, and the overall economy. It underscores the challenges Pakistan faces in controlling rising prices and ensuring economic stability. As the situation continues to evolve, authorities will be closely monitoring these inflationary trends and implementing necessary measures to address them.
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