Pakistan Economy_Inflation pressure likely to ease off, (AKD Daily, Oct 31, 2022)
Inflation pressure likely to ease of
CPI inflation for the month of Oct’22 is likely to settle around 21.3%, the lowest it has
been recorded since May’22. This comes on the back of monthly inflation reading of 0.3%
MoM and takes the average inflation during 4MFY23 to 24.2%.
However, our headline inflation estimates comes with a catch as it is calculated with the
base electricity tariff of PkR6.4/unit that appeared in PBS’ calculations for Sept’22 CPI.
Note, last month’s confusion in calculations of CPI saw PBS using different numbers for
calculating CPI and SPI which resulted in CPI reading surprising our estimates.
Our official CPI estimate also does not incorporate any reversal in the relief given in the
last month’s electricity tariff which was to be reversed in 6 equal installments as there
has been no clarity available on the subject matter and the adjustments are not visible in
weekly SPI data either.
Food inflation has continued to soar unabated and hovering close to 32%YoY in Oct’22,
close to 14yr record it set in Aug’22. On monthly basis, the food inflation is expected to
settle ~1.9%MoM and is driven by increase in prices of Milk and Wheat and their derivatives.
Barring any major surprises, the headline CPI inflation seems to have peaked out but will
remain elevated at current levels owing to energy inflation in the coming winter months
where we may see energy mix shifting away from cheaper sources of energy. The major
fall in headline inflation will come from Jun’23 where the headline inflation could fall to
12% - 14%, amid high base effect
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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