Weekly Inflation Decreases 1.7% Due to Oil Price Decline
Published on: October 21, 2023.
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Owing to the reduction in prices of petroleum products in line with global trends and the fall in the dollar rate in the wake of a crackdown on currency smugglers and hoarders, the inflation rate has decreased in Pakistan, providing some relief to people during these challenging times.
According to the weekly report of the Pakistan Bureau of Statistics (PBS), the inflation rate, measured by the Sensitive Price Indicator (SPI), fell by 1.7% compared to the previous week, reaching an annual decrease from 38.28% to 35.45% for the week ended on October 19, 2023.
The report also highlights that during this week, prices of 24 items dropped, while prices of 14 items increased. The remaining 13 items in the SPI basket remained unchanged.
Notably, the price of 1kg onion fell by Rs9.48, and the price of chicken also decreased by Rs20.6. In addition, the price of lentils dipped by Rs11.03 per kg. Prices of tea and rice also fell during this week.
However, rates of 14 items, including eggs, mutton, and beef, increased, while bread and milk powder saw no change in their rates.
Earlier in October, it was reported that the monthly inflation, measured by the Consumer Price Index (CPI), rebounded to 31.4% in September, the highest in four months, mainly due to an administered increase in electricity and fuel prices.
This increase in inflation has had a substantial impact on consumers, especially considering the higher rates of poverty and unemployment. The rise in the CPI was primarily driven by increased energy prices, while the increase in perishable food items slowed down to single digits.
The cost of electricity has risen by 164% compared to September of the previous year. Similarly, gas prices have increased by 63% compared to a year ago, even before the upcoming increase in gas prices.
Petrol has also become more expensive, selling for Rs283 per litre, an increase from the previous year. Prices of non-perishable food items, such as sugar, have continued to rise. The current CPI reading suggests that the government and the State Bank of Pakistan are likely to miss the annual inflation target of 21% by a wide margin, despite the high costs inflicted on the exchequer and businesses by maintaining a high interest rate of 22%.
