spi records highest level in seven weeks
Published on: November 11, 2023.
Filed under:
Pakistan Sees Surge in Food Prices Leading to Inflation Spike
In the week ending November 8, 2023, the Pakistan Bureau of Statistics (PBS) reported a 0.73% inflation on a week-on-week basis, resulting in the highest Sensitive Price Indicator (SPI) reading in seven weeks. This increase has primarily been attributed to a notable rise in food prices, with tomatoes experiencing the most significant increase of 15.43% during this period. Potatoes also saw a surge in prices, rising by 4.47%. Other food items that experienced significant price hikes include wheat flour (2.36%), garlic (2.16%), salt powdered (1.82%), chicken (1.60%), Lipton tea (0.96%), georgette (0.95%), bananas (0.94%), and shirting (0.58%).
- Tomatoes: 15.43% increase
- Potatoes: 4.47% increase
- Wheat Flour: 2.36% increase
- Garlic: 2.16% increase
- Salt Powdered: 1.82% increase
- Chicken: 1.60% increase
- Lipton Tea: 0.96% increase
- Georgette: 0.95% increase
- Bananas: 0.94% increase
- Shirting: 0.58% increase
Out of the 51 items, 39.22% experienced price hikes, while 15.69% observed a decrease, and 45.09% remained unchanged in price during the week.
Arif Habib Limited highlighted that the SPI reading soared by 0.73% in the reviewed week, marking the highest increase since September 21, 2023. Year-on-year comparisons depicted a staggering 29.86% increase in inflation readings from the same week in the previous year. Notably, energy and food prices showed hikes ranging from 50% to a substantial 108.50% in yearly comparisons. These increases encompassed items such as gas charges for Q1, cigarettes, chili powder, wheat flour, various types of rice, and garlic.
The financial markets anticipate sustained high inflation in November due to historical gaps in price increases, which may impact December 2023 due to a low base effect.
The State Bank of Pakistan (SBP) acknowledged that surging gas prices could pose a challenge in controlling inflation but remains confident that these hikes may be counterbalanced by deceleration in other items. As a result, the central bank maintains its forecast for average monthly inflation at 20-22% for the fiscal year 2023-24, with an expected sharp drop in inflation from January 1, 2024. Contrarily, the Consumer Price Index (CPI) for October 2023 hit a 10-month low at 26.9%, contrasting the four-month high recorded in September 2023.
Source: The Express Tribune
