March CPI inflation recorded at 10.8%YoY – Alfalah Securities Limited

Karachi: Consumer price index (CPI) is reported to stand at 10.80% in March 2012 lower than Securities Limited’s expectation of 11.14%.

According to Alfalah Securities Limited, the Core inflation measured by non‐food non‐energy (NFNE) increased by 10.8% in March 2012 as compared to an increase of 10.6% in February 2012 and by 9.6% in March 2011. Inflation during March witnessed a significant surge is several segment where food and non‐alcoholic beverages prices gone up by 9.8%, alcoholic beverages and tobacco by 8%, clothing and footwear prices soared 16.6%, housing water, electricity and gas fuels 7.5%, health care charges 12%, transportation 19%, education 12% over March 2011. Moreover, furnishing and household equipment maintenance charges went up by 19.6%, recreation and culture by 6.5%, restaurants and hotel charges by 11.2% against corresponding month of the last year.

Considering the current inflation data the discount rate are likely to be kept unchanged at 12% in anticipation of higher inflation ahead, continued high government borrowing and risks on the balance of payment despite a considerable positive real rates. State Bank of Pakistan (SBP) is scheduled to release Monetary Policy Statement (MPS) on April 13, 2012 for the next two months. The CPI inflation is likely to inch up further going forward mainly due to exorbitant increase in petroleum prices, electricity tariffs and rising food prices.