"Volatile price items, to be excluded in the newly proposed measure RSC-CPI, are identified by analyzing the list and frequency of commodities that have been trimmed frequently in the past while computing monthly weighted trimmed mean measure," it added. Commodities that were trimmed out 13 and above times since July 2008 to February 2013 are selected for permanently excluding from the CPI basket. This newly-developed component includes a mix of both food and non-food commodities that show persistent price behavior. Fifty commodities included comprise relatively stable component (RSC-CPI) with a weight of 67.69, the SBP maintained.
According to the SBP, new method has been achieved by making use of trimming approach on past data on monthly CPI changes to isolate a RSC-CPI as a new measure of core inflation. This method ensures inclusion of both food and non-food commodities that show persistent price behavior in Pakistan. Based on the developments in core inflation measured by RSC-CPI, Core RSC inflation on year-on-year basis is recorded at 4.0 percent in January 2018 compared to 4.3 percent in the previous month and 4.9 percent in the corresponding month of last year.
In addition, Core RSC inflation on month-on-month basis is recorded at 0.6 percent in January 2018 compared to 0.1 percent in the previous month and 0.9 percent in the corresponding month of last year.
The inflation monitor revealed that CPI inflation on year-on-year basis in federal and provincial capitals of Pakistan showed mixed trend during January 2018. Among these five cities, the lowest inflation was observed in Karachi at 2.9 percent while the highest inflation was observed in Quetta at 5.9 percent.
Income group-wise data shows that income group above Rs 35,000 witnessed higher inflation as compared to other quintiles as well as overall CPI during January 2018 in General, Food and Non-food groups. The income groups (Up to Rs 8,000) observed lowest inflation in general CPI and food groups; and income groups (Up to Rs 8,000 & Rs 8,001- 12,000) observed lowest inflation in non-food groups among income groups during January 2018.