Inflation

"It is a pleasant surprise to see the headline CPI inflation print at 5.88 per cent in Nov-22 from 6.77 per cent in Oct-22 since most market participants estimated it to be above 6.0 per cent. This is an eleven-month low figure and is clearly driven by the faster-than-expected decline in food inflation which stood at 5.1 per cent in the previous month," Suman Chowdhury, Chief Analytical Officer said.

This is the first fall seen in retail inflation after a continuous rise for the past 10 months. The slide in retail inflation was mainly due to fall in food inflation, which went down to 4.67 per cent in November. In October it was at 7.01 per cent, according to data released by the Ministry of Statistics and Programme Implementation on Monday.

In a statement, PBF CEO Ahmad Jawad said: "Pakistan's economy continues to slump despite resumption of the much-awaited International Monetary Fund's (IMF) Programme. Finance Minister Ishaq Dar must announce a clear policy on the rupee to ease the pain of traders and to save the industries. "We still have foreign debt of $130 billion and $73 billion due in three years. Our deficit for next three years is a minimum of $20 to $30 billion. Additionally, super inflation is killing the poor. This is a financial emergency."

According to a report by the company, in November the prices went up by about Rs 6-7/bag. While the prices remained flat in Western and Central parts of the country, the rates hardened in Northern, Eastern and Southern regions, Emkay Global said. According to the report, the cement companies are attempting further price hikes of Rs 10-15/bag across the country this month.

The Reserve Bank of India (RBI) has raised repo rates four times since May and it is expected to hike the key lending rates again on December 7. Though high interest rates help in curbing liquidity to check inflation, it does not necessarily leave a good taste in the mouth for bourses. Higher interest rates translate into a decline in stock market's value.

But investors who are expecting a full pivot may be putting the cart before the horse, CNN reported. Powell's admission that "the path ahead for inflation remains highly uncertain" means that rate hikes could be here for a while. Investors have been closely watching for any clues that the Fed might slow or pause its painful path of rate hikes, intended to fight persistent inflation.

The new rates would come into effect from Monday (November 21). This is the fourth price hike this year effected by Mother Dairy. After the latest hike, full-cream milk will cost Rs 64 per litre, while token milk will cost Rs 50 per litre, a company spokesperson said. The company though has not revised the price of full-cream milk is sold in 500 ml packs.

The persistence of high inflation is currently the biggest threat to financial stability and growth, de Guindos said, adding that the ECB's monetary policy should be geared to achieving price stability. As it is becoming more difficult for companies and households to repay their debts in the deteriorating environment, banks could face higher loan defaults in the medium term, the ECB said in its report.

In 2019, food inflation had risen strongly to 12.2 per cent year-on-year in December. Its total sequential momentum during July-October then was 4.8 per cent versus 2.6 per cent this year, the report notes. It was a case of very high vegetable inflation in 2019, driven by a spike in onion prices which had increased 171 per cent during July to December. Inflation in other components like rice and pulses was not a major driver.

According to Commerce Ministry data, imports though rose to $56.69 billion in October 2022 as against $53.64 billion in October 2021. In the April-October 2022 period, exports grew 12.55 per cent to $263.35 billion. Imports during the same period rose 33.12 per cent to $436.81 billion, the data showed.