Pakistan Faces Rising Inflation in June, Despite Drops in Staple Cereal Prices

Islamabad: Pakistan’s Consumer Price Index-based annual headline inflation climbed to 12.6% in June 2024, marking a modest increase from the previous month, with significant shifts in food prices and terms of trade.

According to National Disaster Management Authority, for July 2024, while the overall inflation rate saw an uptick, there was a nuanced movement in food prices. Annual food inflation edged up slightly to 0.97%, recovering from a slight deflationary trend in May. In contrast, prices for staple cereals like wheat, wheat flour, and rice declined month-over-month. However, year-over-year data showed a significant price rise for the rice variety Irri-6 and a decrease for wheat and wheat flour.

The report further detailed fluctuations in non-cereal food prices, noting a significant monthly increase in the price of pulse Gram and minor increases in pulse mash. Conversely, the price of pulse masoor saw a slight decline. Notably, year-over-year comparisons revealed substantial price spikes for several pulses, including mash, Gram, moong, and masoor. Meanwhile, prices for chicken and eggs dropped by 3%, and sugar prices decreased by 1% compared to May 2024. Despite these monthly decreases, the annual price of sugar spiked by 16%, while significant declines were observed in the prices of live chicken, cooking oil, and ghee, with a slight reduction in egg prices.

The Terms of Trade (ToT) improved by 8% over the past month and by an impressive 54% compared to the previous year, signaling some economic recovery despite the inflationary pressures.

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