Inflation to Rise to 4.15% in December 2024 Amidst Seasonal Demand and Fuel Price Revisions

Karachi: Inflation is expected to see a slight increase in December 2024, reaching 4.15% year-on-year, driven by higher prices in fruits, vegetables, and increased demand for clothing due to cooler temperatures across the nation. The transport index also contributed to the rise, following a price revision of PKR 3.70 and PKR 3.30 per liter for MS and HSD fuels, respectively.

According to AKD Securities Limited, while the overall inflation rate shows a modest monthly uptick of 0.15%, the housing index is forecasted to decrease by 0.70% month-on-month. This reduction is attributed to adjustments in QTA and FCA, which are expected to lead to an estimated 3.5% decrease in electricity tariffs for December.

The Food index, which had seen a decline of 0.20% in November, is anticipated to increase by 0.37% in December. This reversal is due to rising prices of essential commodities such as potatoes, eggs, cooking oil, and sugar, which increased by 7%, 5%, 3.5%, and 2% month-on-month, respectively. Despite these fluctuations, the average inflation for the calendar year 2024 is projected to be 12.65% year-on-year, marking a significant reduction from the 30.76% recorded in 2023.

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