AKD Securities Limited - AKD Daily.

Karachi -- November 17, 2020 (PPI-OT)

Pakistan Economy: Volatile food and energy prices cool off for soft Nov'20 read

Preliminary price trends for the month of Nov'20 signal relative ease in inflationary pressures, with headline inflation expected to decline to 7.88%YoY in Nov'20 vs. 8.91%YoY last month and 12.67%YoY in Nov'19. Sequentially, the index is likely to marginally move up by 0.39%MoM vs. 1.70%MoM in Oct'20 and 1.35%MoM in Nov'19.

The expected decline in inflation is mostly on account of i) price normalization in certain food items (i.e. wheat, pulses, and rice), ii) lower energy prices (i.e. both gov't administrated POL product prices and electricity prices on account of lower Fuel Charge Adjustment (FCA)), and iii) high base effect.

Soft near-term inflationary backdrop...