Qudsia Bano

Despite a noticeable easing in overall inflation during December, household budgets continued to face pressure from rising electricity, gas and housing-related costs, according to the latest data released by the Pakistan Bureau of Statistics (PBS).

While headline inflation slowed to 5.6 percent in December, the housing, water, electricity, gas and other fuels category recorded a year-on-year increase of 6.9 percent, indicating that essential utility-related expenses remain a major source of financial strain for consumers. On a month-on-month basis, this category also increased, reflecting persistent cost pressures in basic services.

Electricity charges continued to rise during the month, contributing significantly to household expenses. Gas prices and other fuel-related costs also remained elevated, adding to the burden on consumers despite relief seen in food prices. These increases offset part of the benefit households gained from declining prices of vegetables and other food items.

The data further show that housing-related costs, including rent and maintenance charges, continued to trend upward. Urban households were particularly affected, as utility expenses form a larger share of their overall consumption basket. As a result, even with easing food inflation, many households experienced limited relief in their overall cost of living.

In addition to utilities, other service-related components such as housing maintenance and associated charges also recorded increases, reinforcing the persistence of non-food inflation. These trends underscore the structural nature of cost pressures in essential services, which tend to adjust more slowly than food prices.

While headline inflation moderated due to lower food prices, the continued rise in electricity, gas and housing costs highlights the uneven nature of inflation relief. The data suggest that households remain exposed to elevated living costs, particularly in sectors where prices are influenced by administered tariffs and fixed service charges.

Economists note that unless there is a sustained easing in energy and housing-related costs, overall inflation may remain under pressure despite short-term relief from food prices. The December figures underscore the need for careful monitoring of utility tariffs and housing costs to ensure broader price stability in the months ahead.

Credit: INP-WealthPk