Views of Price Statistics Section on the Press Clipping, “Understatement of the Rate of Inflation”

Dated : 7 February 2020

It has been observed in number of print and electronic news items, which have given the erroneous impression, that inflation has been understated.
Pakistan Bureau of Statistics (PBS) states that the estimates of different researchers regarding inflation figure was around 13%, whereas the actual inflation compiled by PBS for the month of January, 2019 is (14.6%) more than what was estimated. This shows PBS non-biased towards compilation and publication of price statistics.
PBS mentioned that it followed standing operating procedures regarding time schedule for data collection and this inflation is higher because the prices were collected during the peak of the price surge in mid of the month.

Furthermore, PBS clarifies that as far as the average price of wheat flour (Rs.47/kg) is concerned it is weighted average price calculated from varying prices from Rs.800 to Rs.1200 in different cities as per availability of flour in the market. The prices in Punjab were on average Rs.40 per kg while in Karachi it was highest at Rs. 60 per kg. City-wise prices of 51 essential items are given as annexure of the CPI on the website of PBS. It is observed that in Punjab the wheat flour average price ranges from 800 to 942 per 20 kg, where both the government controlled and private flour is available in the market. While in KPK, Sindh and Balochistan the average wheat flour price ranges from 1000 to 1200 per 20 kg.

The comment regarding 5% increase in Rent: The rent prices are collected on quarterly basis and computed on the basis of weighted average approach based on the data collected from small and large housing units, which revealed that the year on year rent increase is 5.63% for the current quarter. This increase is aligned with historical trend of rent increase given in the table below; however it is not essential that rent increases every month.

Period %Change
Jul 17 6.17
Oct 17 5.89
Jan 18 4.26
Apr 18 5.42
Jul 18 5.89
Oct 18 7.06
Jan 19 6.34
Apr 19 6.29
Jul 19 6.46
Oct 19 5.02
Jan 20 5.63

It is further clarified that PBS collects real time prices data based on android technology equipped with GPS and monitored at different levels. The prices data collection, validation and publication are well synchronized with best global standard Classification of Individual Consumption by Purpose (COICOP). PBS compiles data without any political intervention or motivation and transparency is ensured regarding city-wise price data. Therefore, fudging of the data is not possible.