Inflation declines to 8.4 percent in July’2021

August 2, 2021

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Pakistan Bureau of Statistics (PBS) announced July’ 2021 National Inflation which came in at 8.4%. In comparison, average inflation in the month of June-2021 was 9.7%, hence a 1.3% decline was witnessed in July.

Urban CPI stood at 8.7% and Rural CPI stood at 8% during July 2021.

Food inflation reduced to 1.74% as compared to June-2021, primarily due to significant price reduction in major Food items.

As per the PBS, weighted trimmed mean Urban increased by 9.0% on (YoY) basis in July-2021 as compared to 9.4% in the previous month and 6.7% in July-2020.

Food Index (weight in CPI 34.58%) inflation remained limited during the month, helping in restricting overall Inflation. Perishable Food Items increased by 9.45% over last month and Non-Perishable Food Items increased by meagre 0.65% from last month. Resultantly, the Average Food & Non-alcoholic Bev Index increased by 1.75% MoM.

Transport head also went up by 4.01% MoM on the back of an increase in petrol and diesel prices during the month.

State Bank of Pakistan expects Inflation to average between 7% to 9% during the Fiscal Year 2021-2022. However, analysts believe that keeping in view of Higher Crude Oil Prices in the International Market and expected increase in Electricity Tariff under the IMF program(if it continues), Inflation is likely to exceed 9%.