During the month of November, Pakistan witnessed another dip in inflation to 8.35% YoY and 0.82% MoM. The inflation for the first five months reached to 8.76% YoY.
The main cause of this dip is due to the declining trend of inflation in the food group.
The food and beverages inflation slowed down to 1.92% MoM from 3.9% in October. As the prices of food commodities witnessed an increase, the purchasing power of the common man dropped.
For instance, chicken has seen an increase in prices to up to by 21.36% whereas tomatoes and potatoes seen a surge by 15.68% and 8.79% respectively. On the other hand, prices of wheat and flour decreased by 4.83% and 4.1% respectively.
Where there are several other factors as well which contributed to this declining trend in inflation, it is also important to highlight what inflation means.
Inflation is simply the rise in prices of common commodities including food items, clothing, housing and so on. This means that a drop in inflation is usually not appreciable. This could lead to low economy.
However, it could also have some benefits if the inflation is low but stable and predictable. It would give the opportunity to plan one’s finances.
During October, the inflation was at 8.9% from 9.0% in September 2020.