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Ramadan Effect on Price Movements: Evidence from Pakistan


  • Muhammad Akmal

    () (State Bank of Pakistan)

  • Muhammad Usman Abbasi

    () (State Bank of Pakistan)


This paper attempts to verify the widespread perception that general price level tends to rise due to the month of Ramadan in Pakistan. For this purpose, the ARIMA methodology (simple and extended form), along with simple graphical and scenario analysis, has been applied on the monthly data for overall, food and non-food indices of consumer prices in Pakistan from July 1991 to December 2008. Contrary to the general perception, we could not find any evidence of systematic acceleration in overall CPI, food and non-food price levels in the month of Ramadan in Pakistan. The results can be explained by price hikes well before the start of the holy month and government activism in regulating prices of essential food items in Ramadan. However, we do find a significant positive effect on the prices of fruits due to Ramadan.

Suggested Citation

  • Muhammad Akmal & Muhammad Usman Abbasi, 2010. "Ramadan Effect on Price Movements: Evidence from Pakistan," SBP Working Paper Series 32, State Bank of Pakistan, Research Department.
  • Handle: RePEc:sbp:wpaper:32

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    References listed on IDEAS

    1. Riaz Riazuddin & Mahmood ul Hasan Khan, 2005. "Detection and Forecasting of Islamic Calendar Effects in Time series Data," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 1, pages 25-34.
    2. Madhavi Bokil & Axel Schimmelpfennig, 2006. "Three Attempts at Inflation Forecasting in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(3), pages 341-368.
    3. Yucel, Eray M., 2005. "Does Ramadan Have Any Effect on Food Prices: A Dual-Calendar Perspective on the Turkish Data," MPRA Paper 1141, University Library of Munich, Germany.
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    Cited by:

    1. Riaz Riazuddin, 2012. "Construction and Seasonal Patterns of Islamic Hijri Calendar Monthly Time Series: An Application to Consumer Price Index (CPI) in Pakistan," SBP Working Paper Series 50, State Bank of Pakistan, Research Department.

    More about this item


    Ramadan; CPI; ARIMA.;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation


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