KARACHI: The Consumer Price Index (CPI) reached 6.5 per cent in November 2018, which was below the expectations of the analysts.

In October the CPI increase was recorded at 6.8 per cent and 4.0 per cent in November 2017 respectively.

On a month-on-month (MoM) basis, it decreased by 0.3 per cent in November 2018 as compared to an increase of 2.3 per cent in the previous month and an increase of 0.4% in November 2017.

However, the State Bank of Pakistan (SBP) in its monetary policy statement had said that new challenges for Pakistan’s economy would be a rising inflation, an elevated fiscal deficit and low foreign exchange reserves.

SBP projected average headline CPI inflation for 2018-19 in the forecast range of 6.5–7.5 percent, above the annual target of 6.0 percent.

Although the recent decline in international oil prices could potentially play a positive role in slowing down the current inflation trajectory the risks currently remain tilted towards the downside, the SBP monetary policy said.

The central bank has also increased the discount rate by 1.50 per cent for the next two months to 10 per cent, which will further curtail the rising inflation.

However, the analysts were of the view that the inflation may touch 7-8 per cent in the current fiscal year, as the policy discount rates have gone up which will constrain the purchasing power and on the other hand, low crude oil price will also support the economy if it continues in future.

Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 8.3 per cent on (YoY) basis in November 2018 as compared to an increase of 8.2 per cent in the previous month and 5.5 per cent in November 2017.

On (MoM) basis, it increased by 0.4 per cent in November 2018 as compared to an increase of 1.1 per cent in the previous month, and an increase of 0.3% in the corresponding month of last year i.e. November 2017.

Core inflation measured by 20 per cent weighted trimmed mean CPI (Core Trimmed) increased by 6.7 per cent on (YoY) basis in November 2018 as compared to 6.7 per cent in the previous month and by 4.2 per cent in November 2017.

On (MoM) basis, it increased by 0.3 per cent in November 2018 as compared to an increase of 0.8 per cent in the previous month and an increase of 0.3 per cent in the corresponding month of last year i.e. November 2017.