Short-term Inflation Declines by 1.7%, Surges to 35.45% YoY
Published on: October 21, 2023.
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The Sensitive Price Index (SPI) for short-term inflation has decreased by 1.7 percent in the week ending on October 19, according to data released by the Pakistan Bureau of Statistics (PBS). However, on a year-on-year basis, the SPI has surged to 35.45 percent, primarily due to the increasing prices of essential food items and electricity.
The SPI measures the prices of 51 items, and in the previous week, prices of 14 goods increased, 24 decreased, and 13 remained unchanged compared to the previous week.
During the week under review, the largest price increases were seen in eggs at 3.44 percent, powdered salt at 2.63 percent, shirting at 2.18 percent, mutton at 1.01 percent, beef at 0.84 percent, cooked beef at 0.72 percent, georgette at 0.52 percent, washing soap at 0.48 percent, prepared tea at 0.34 percent, cooked daal at 0.34 percent, potatoes at 0.25 percent, and firewood at 0.22 percent.
On the other hand, 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 broken basmati rice by 2.17 percent on a week-on-week basis.
Year-on-year price hikes were observed in electricity charges for the first quintile at 136.89 percent, gas charges for the first quintile at 108.38 percent, cigarettes at 94.46 percent, chili powder at 84.11 percent, broken basmati rice at 81.74 percent, wheat flour at 80.73 percent, rice Irri-6/9 at 71.43 percent, sugar at 66.29 percent, gur at 61.50 percent, gents’ sponge chappal at 58.05 percent, powdered salt at 57.40 percent, and Lipton tea at 56.27 percent.
While a reduction in petroleum prices is expected at the end of this month, transportation costs have not been affected by these price changes due to the absence of a regulatory system.
The SPI has consistently remained above 30 percent for six consecutive weeks. The caretaker government made significant cuts in petroleum product prices in the previous week, and the impact of these reductions on everyday expenses is expected to become more visible in the coming weeks.
Earlier this year in May, the SPI remained above 45 percent for three weeks after reaching an all-time high of 48.35 percent on May 4. Factors contributing to this inflation included the depreciation of the rupee, increasing petrol prices, sales tax, and electricity bills.
This month’s report indicates that the monthly inflation measured by the Consumer Price Index (CPI) has returned to 31.4 percent in September, the highest level in four months. This increase is mainly due to administrative hikes in electricity and fuel prices. The rise in prices of perishable food items has slowed down to single digits.
Electricity costs have risen by 164 percent compared to the previous year, and gas prices are up by 63 percent, even before the impending increase. Petrol prices have also significantly increased, selling at Rs283 per liter. Non-perishable food items, including politically sensitive sugar, continue to see price increases. The CPI reading suggests that the government and the State Bank of Pakistan are likely to miss the annual inflation target of 21 percent by a considerable margin, despite the costs imposed on the exchequer and businesses due to the high interest rate of 22 percent.
Source: Pakistan Today
