Double-digit headline inflation expected for June

KARACHI: The headline inflation based on the Consumer Price Index (CPI) may remain around 10 per cent Year-on-Year (YoY) in June 2021, analysts said on Tuesday.

The analysts at Insight Research estimated the CPI for June 2021 to arrive at 10.2 per cent against 10.8 per cent reported in May 2021.

Similarly, urban CPI is estimated to reach 10.3 per cent YoY, while rural inflation is expected to arrive at 10.1 per cent. On a MoM basis, inflation is expected to inch up 0.2 per cent. It continued its double-digit trajectory on the back of rising prices in foods (11.6 per cent), housing (10 per cent), and transportation index (16.4 per cent).

The Insight Research initially averaged CPI to remain in the region of 8.3 per cent to 8.5 per cent in FY22. Going forward, the inflation outlook remains uncertain, given some upside risks, which includes further rise in the fuel prices, upward adjustment in electricity and gas tariffs, and abrupt food prices due to the ongoing supply disruption.

Analysts at Arif Habib Limited forecast June 2021 inflation to settle at 9.86 per cent YoY, compared with 8.59 per cent in June 2020 and 10.87 per cent in May 2021, respectively. This will take the FY21 average inflation to 8.9 per cent, compared with 10.8 per cent in FY20.

They said YoY uptick in CPI will likely be led by transport (15.7 per cent YoY), food (11.4 per cent YoY), clothing and footwear (10.2 per cent YoY), alcoholic beverages and tobacco (4.8 per cent YoY), housing (8.9 per cent YoY), household equipment (9.8 per cent YoY) and miscellaneous (9.7 per cent YoY).

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