UPDATE 1-Pakistani Oct inflation at 22-mth low, but seen up

KARACHI, Nov 11 (Reuters) - Pakistan's consumer price index (CPI) rose 8.87 percent in October, the slowest pace in 22 months, but analysts said inflation is likely to rise at a faster pace in coming months. The CPI, a key indicator of inflation, was up 0.95 percent over September, the Federal Bureau of Statistics said on Wednesday. The year-on-year October rise in the CPI was the slowest since December 2007. "This is probably the last month of a low CPI this fiscal and it is likely to grow at a faster pace from next month as the impact of the high base will start to reduce," said Khalid Iqbal Siddiqui, director at Invest and Finance Securities. Inflation peaked at a record high of 25.3 percent in August 2008 because of higher commodity and oil prices before easing in 2009. "For next month, the number is likely to be 9.5-10 percent and from December onwards it would probably be even higher due to the base effect as well as current high price trends," said Siddiqui. The October numbers may encourage the central bank to cut its policy rate by 50-100 basis points in a monetary policy review later this month, analysts said. However, they said the rate cut may be the last one for the 2009/10 fiscal year (July-June) as higher inflation will limit the chances of further easing. The central bank, the State Bank of Pakistan, in September kept its policy rate unchanged at 13 percent for October and November amid fear of fiscal slippages and concern that inflation may not have peaked. Meanwhile, the wholesale price index (WPI), another indicator of inflation, rose in October by 3.83 percent from a year earlier, according to date from the statistics bureau. Using 2000/01 as the base year, the CPI index stood at 209.11 against 207.14 in September, while the WPI index stood at 215.01 in October against 212.53 in September. Oct Sept Consumer price index 209.11 207.14 Month-on-month change (pct) 0.95 0.45 Year-on-year change (pct) 8.87 10.12 Wholesale price index 215.01 212.53 Month-on-month change (pct) 1.17 0.17 Year-on-year change (pct) 3.83 0.72 *Note: figures are sometimes adjusted retrospectively. (Reporting by Faisal Aziz and Augustine Anthony in ISLAMABAD; Editing by Robert Birsel) (For more Reuters coverage of Afghanistan and Pakistan, see: http://www.reuters.com/news/globalcoverage/afghanistanpakistan) (If you have a query or comment about this story, send an e-mail to [e-mail]) Keywords: PAKISTAN ECONOMY/CPI (E-mail: [e-mail]; Reuters Messaging: [e-mail]; Karachi newsroom: [phone]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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