Short-Term Inflation Recorded at 35.4%, Highlighting Economic Impact
Published on: October 21, 2023.
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Short-term Inflation in Pakistan Rises to 35.45%
In the week ending on October 19, short-term inflation in Pakistan reached a staggering 35.45 percent on a year-on-year basis, according to official data released on Friday. This significant increase can be attributed to the rising prices of essential food items and electricity, as measured by the Sensitive Price Index (SPI). It is worth noting that the SPI has remained above 30 percent for six consecutive weeks.
Last week, the caretaker government introduced a substantial reduction in petroleum product prices. This reduction is expected to have a positive impact on everyday prices in the coming weeks. Analysts predict further decreases in petroleum prices in the upcoming review scheduled for the end of the current month. However, the cost of transportation remains unaffected by these reductions due to the absence of a regulatory system.
Recent data shows that short-term inflation decreased by 1.7 percent compared to the previous week. Out of the 51 items in the SPI basket, the prices of 14 goods increased, while the prices of 24 items declined. Additionally, prices of 13 items remained unchanged compared to the previous week.
During the week under review, several items experienced substantial increases in prices compared to the same week in the previous year. The items that saw the highest price hikes include electricity charges for the first quintile (136.89 percent), gas charges for the first quintile (108.38 percent), cigarettes (94.46 percent), chilies powder (84.11 percent), rice basmati broken (81.74 percent), wheat flour (80.73 percent), rice Irri-6/9 (71.43 percent), sugar (66.29 percent), gur (61.50 percent), gents sponge chappal (58.05 percent), salt powdered (57.40 percent), and tea Lipton (56.27 percent).
Furthermore, the biggest increases in prices on a week-on-week basis were observed in the prices of eggs (3.44 percent), salt powdered (2.63 percent), shirting (2.18 percent), mutton (1.01 percent), beef (0.84 percent), cooked beef (0.72 percent), georgette (0.52 percent), washing soap (0.48 percent), tea prepared (0.34 percent), cooked daal (0.34 percent), potatoes (0.25 percent), and firewood whole (0.22 percent).
In May, the SPI reached alarming levels, staying above 45 percent for three weeks and hitting an all-time high of 48.35 percent on May 4. Several factors contribute to this inflationary trend, including the depreciation of the rupee, rising petrol prices, sales tax, and electricity bills.
On a more positive note, the prices of onions dropped by 8.45 percent, chicken by 5.46 percent, pulse masoor by 3.38 percent, sugar by 3.07 percent, garlic by 2.24 percent, and rice basmati broken by 2.17 percent on a week-on-week basis.
In conclusion, short-term inflation in Pakistan has reached alarming levels due to the rising prices of essential food items and electricity. While efforts have been made to reduce petroleum prices, transportation costs remain unaffected. It is crucial for the government to address this issue to alleviate the burden on consumers.
Source: [Dawn](https://www.dawn.com){:target=”_blank” rel=”nofollow”}
