PPI Original Text (PPI-OT) – CPI inflation rises to 12.3%YoY in May 2012 – Alfalah Securities Limited

Karachi, June 04, 2012 (PPI-OT): CPI inflation rose to a high of 12.3%YoY in May 2012 as against 11.27% in the previous month while average inflation in the July‐ April period stood at 10.97%.

According to Alfalah Securities Limited, the hike in inflation is attributed to high international petroleum and commodity prices which has exerted pressure on the local inflation.

According to PBS data, during the period under review prices of furnishing and household equipment maintenance increased by 21.5%, recreation and culture activity charges by 19%, transportation charges 17.1%, clothing and footwear 16%, education expenses 12.2%, alcoholic beverages and tobacco 11.64%, food and non‐alcoholic beverages by 11.24%, restaurant and hotelling 11% and housing, water, electricity, gas and fuel by 10.8% over corresponding month of last year.

Core inflation measured by non‐food non‐energy CPI (Core NFNE) increased by 11.1%YoY and 0.8%MoM in May 2012, mainly due to an upward revision in electricity and fuel charges. Alfalah Securities Limited expects CPI inflation would inch up going forward however; the average inflation would remain below the target of 12% for FY12 due to which the discount rate is expected to remain unchanged in the upcoming monetary policy.

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