The inflation rate went down to 3.9 per cent in January 2015 over the corresponding period of last year mainly due to the tumbling oil prices from last several months.

Pakistan’s headline monthly inflation, measured by the consumer price index (CPI), is fluctuating around 4 per cent from last three months only due to the continuously declining oil prices. The inflation rate remained at 3.9 per cent in January 2015, 4.3 per cent in December 2014 and 3.9 per cent in November 2014.

“There is no other main reason behind lower inflation rate except petroleum products prices, which is constantly reducing in the country. Inflation would remain below the government’s target by the end of ongoing financial year”, said a Finance Ministry’s official while talking to The Nation.

The State Bank of Pakistan (SBP) had recently cut the interest rate projection by 1 per cent to 8.5 percent due to the continuous decline in inflation rate. The SBP had also noted that inflation would further decline in the months to come. The SBP has revised downwards its forecast range for average CPI inflation to 4.5-5.5 percent for FY15, well below the annual target of 8 per cent.

It is worth mentioning here that petroleum products prices are declining from last September, which controlled the inflation rate. Petroleum products prices had been decreased by up to Rs 54.32 per liter since September 2014. Petrol price had reduced by Rs 37.68 per liter, high-speed diesel price decreased by Rs 28.73 per liter, Kerosene oil by Rs 35.61 per liter, Light Diesel Oil by Rs 35.33 per liter and HOBC by Rs 54.32 per liter in last five months.

According to the data of Pakistan Bureau of Statistics (PBS), average inflation in first seven months (July-January) of the ongoing fiscal year has remained at 5.8 percent over the corresponding period last year. Meanwhile, the sensitive price indicator (SPI), which gauges weekly inflation in kitchen items, increased by 3.14 per cent in July-January 2014-2015 as against the same month of last year. Similarly, the wholesale price index (WPI) based inflation increased by 1.48 percent in the period under review.

In January 2015, food and non-alcoholic beverages prices were up by 2.13 per cent and utilities (housing, water, electricity, gas and fuel) by 5.74 per cent. Health and education charges became dearer by 6.07 percent and 14.2 percent, respectively.

Prices of alcoholic beverages and tobacco stood at 20.21 per cent, clothing and footwear 8.09 per cent and furnishings and household equipment maintenance 6.42 per cent. Charges related to recreation and culture went up 3.43 per cent and restaurants and hotel 5.97 per cent in January 2015 over the same month in 2014.

However, transportation charges were down by 2.13 percent because of the declining petroleum prices.

Meanwhile, the PBS data showed that price of tomatoes increased by 7.3 per cent in the month of January 2014 against December, price of chicken enhanced by 5 per cent and price of pulse gram went up by 3.96 percent. Similarly, in non-food commodities, price of firewood whole increased by 3 per cent, house rent 2 per cent and medical test 1.8 percent.

Meanwhile, prices of following commodities decreased: potatoes 25.37 per cent, cooking oil 2.27 per cent, besan 2.17 per cent, rice 1.9 per cent and sugar 1.53pc. Similarly, in non-food commodities, price of motor fuel 4.01 percent, and kerosene oil 7.03 percent and transport services 1.53 per cent during January over December.