Headline CPI inflation against core inflation, which strips out volatile food and energy prices.
Headline CPI inflation against core inflation, which strips out volatile food and energy prices.
▸Headline CPI fell 7.1% over the selected period — from 12.60% to 11.70%.
▸Core Inflation fell 26.2% over the selected period — from 12.20% to 9.00%.
▸Over this period, Headline CPI and Core Inflation moved closely together, moving in the same direction (correlation coefficient: 0.64).
Sources:: SBP EasyData
When headline inflation runs well above core inflation, food/energy price shocks are doing most of the work — when the two converge, price pressure has broadened across the economy.
Which measure does SBP pay more attention to?
Central banks generally weight core inflation more heavily for policy decisions, since it better reflects underlying, persistent price pressure rather than temporary food/energy swings.
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