Surging Inflation Hits 43.79% Year over Year
Published on: January 27, 2024.
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Inflation Surges by 43.79% in Pakistan, Straining Consumer Purchasing Power
The week ending January 25 witnessed a sharp surge of 43.79% in inflation, as measured by the Sensitive Price Indicator (SPI), compared to the same week last year. This significant rise in inflation is primarily driven by increased energy and food prices, putting a strain on the purchasing power of consumers. The persistent trend of inflation can be attributed to various factors, including the global surge in commodity prices due to the Covid-19 pandemic, geopolitical tensions like the Russia-Ukraine war, and Israeli aggression on Palestinians. Additionally, the depreciation of the rupee over recent years has amplified imported inflation in Pakistan.
The Pakistan Bureau of Statistics (PBS) reported a marginal 0.14% decline in the weekly inflation reading for the reviewed week, breaking the upward trend observed in the preceding four weeks. On a year-on-year basis, the inflation surge was primarily led by a staggering 1,108.59% increase in gas charges for Q1, reaching Rs1,711 per unit compared to the same period last year. Notable increases were also seen in tomato prices, rising by 133.36% to Rs132.55/kg, cigarette prices (Capstan 20 stick packet) increasing by 93.22% to Rs221.80, and chili powder prices (National 200 gm packet) rising by 81.74% to Rs400.
Various essential items experienced price hikes ranging from 43% to 63%. These items include wheat flour, sugar, gentlemen’s sponge chappal, garlic, gentlemen’s sandal, gur, eggs, and rice irri-6/9. During the week, prices of 15 items (29.41%) out of a total of 51 items in the SPI increased, prices of 13 items (25.49%) decreased, and prices of 23 items (45.10%) remained unchanged compared to the previous week.
December marked a three-month high for Pakistan’s benchmark monthly inflation reading, measured through the Consumer Price Index, reaching 29.7%. The government anticipates elevated inflation readings for January and February, projecting a significant deceleration in the remaining four months (March-June) of FY24. This expected slowdown could potentially support the central bank in considering a key policy rate cut to stimulate economic growth in the country.
Source: The Express Tribune
