Weekly Inflation Sees Slight Decrease
Published on: December 3, 2023.
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Pakistan’s Weekly Inflation Marginally Declined, but Challenges Persist
Men sell vegetables at their makeshift stalls at the Empress Market in Karachi, Pakistan.—REUTERS/FILEPHOTO
The Sensitive Price Indicator (SPI), a key measure of weekly inflation, experienced a marginal decline of 0.06% in the week ending on Thursday (Nov 23), providing a slight reprieve. However, the SPI index remains elevated at 308.9 points, near the previous week’s high, according to the Pakistan Bureau of Statistics (PBS).
The decrease in the index on a week-on-week basis can be attributed to a drop in food prices, while energy (fuel) prices largely maintained an upward trend during the week.
Topline Research reported that the SPI index had surged to 309.1 points in the previous week, registering a multiyear high with a significant increase of 9.95%. This surge was primarily a result of a substantial rise in gas prices for consumers across the board.
On a year-on-year basis, the weekly inflation reading witnessed a staggering increase of 41.13% compared to the same week of the previous year. This highlights the persistent challenges in controlling inflation, particularly in the aftermath of the substantial increase in energy prices.
According to the bureau’s data, several food items saw a decline in prices, including tomatoes (-5.78%), vegetable ghee 2.5kg (-1.36%), cooking oil 5 litres (-1.31%), banana (-0.91%), and eggs (-0.33%). However, notable increases were observed in the prices of garlic (4.61%), onion (2.42%), chicken (1.81%), and potatoes (1.69%).
Out of 51 items tracked, 18 (35.29%) recorded price increases, 12 (23.53%) witnessed decreases, and 21 (41.18%) remained unchanged during the week.
On a yearly basis, gas charges for Q1 witnessed a staggering spike of 1108.59%, contributing significantly to the overall inflation. Other commodities recorded increases in the range of 2% to 95%, including cigarettes, wheat flour, chilies powder, and broken basmati rice.
Analysts predict that the recent increase in gas prices will likely keep the benchmark monthly inflation reading, measured through the Consumer Price Index (CPI), near 27% in November 2023. Additionally, it is anticipated that the gas price hike will contribute to a 2 percentage point increase in inflation for each of the next 12 months, starting from November 2023.
Despite these concerns, Pakistan’s central bank maintains its original forecast for an average monthly inflation reading in the range of 20-22%, citing a potential offset from a drop in the prices of other commodities.
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