SBP claims, recent spike in inflation is transitory
The State Bank of Pakistan (SBP) has declared the recent spike in inflationary pressure as a ‘transitory’ phenomena.
The SBP says that the headline inflation of 14.6 percent was broadly in line with projection of the central bank.
Although the recent spike in inflation had surprised many economic experts, the state bank has taken the position that they were expecting this kind of spike.
It cautioned that it was transitory phenomena and there was no need to change in the earlier projections.
When contacted, high-ranking officials of the planning ministry, the finance ministry and Pakistan Bureau of Statistics (PBS) said that the recent wheat/flour crisis proved to be catalyst for increasing inflationary pressure during January 2020.
House rent, prices of perishable food items, and energy prices also pushed up headline inflation up to an historic level.
With rising headline inflation that had touched a historic peak of last 10 years, the core inflation also went up by few percentage points.
Top official sources who are dealing with inflationary figures told in background discussions that the data of food prices was collected every month and the present time was a period of peak prices of food items in the both rural and urban markets of the country.
Extreme weather conditions have damaged essential food crops, and the prices of meat have also escalated.
The major problem arose when the wheat crisis hit the country, and prices escalated in the domestic market.
This led to inflation, according to government officials.
However, authorities in Islamabad, remain confident that inflationary pressure would start witnessing a decrease by the end of the current month.
It had expressed the hope that the headline inflation will come down significantly.
On monthly average, the inflation will hover around 12.5 percent for February 2020.
The government is reportedly mulling over the option to hike gas prices this week, but it will not result in an unprecedented spike in inflationary pressure.
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