Weekly inflation spikes by 29.6%: Why it matters and what to expect
Published on: October 28, 2023.
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The Sensitive Price Indicator (SPI) revealed a significant increase of 29.65% in weekly inflation for the week ending October 26, 2023, as compared to the same week last year. This surge can be attributed to the rise in energy and food prices.
According to the Pakistan Bureau of Statistics (PBS), the largest contributor to the weekly inflation was the 108.38% increase in gas prices during the first quarter of the financial year 2023-24, followed by a 94.46% rise in cigarette costs.
During the same week, the price of chilli powder rose by 84.11%, broken Basmati rice by 78.51%, wheat flour by 77.49%, sugar by 63.22%, Irri-6/9 rice by 62.83%, men’s sponge chappal by 58.05%, jaggery (gur) by 57.73%, and powdered salt by 54.84% compared to the corresponding week last year.
Despite bumper wheat harvests and surplus production of rice and sugar, Pakistani consumers have been experiencing consistent price hikes for essential commodities such as wheat flour, rice, and sugar.
While the surplus production has reduced the need for wheat imports, traders are gearing up to export a large quantity of rice and some sugar later in the year.
However, the surplus production has not resulted in price stability in local markets, raising concerns about the government’s effectiveness in implementing price control measures and promoting the export of commodities.
Experts predict that inflation will continue to remain high, with gas prices expected to increase by up to 193% from November 1, 2023. This will lead to higher costs for industrial and commercial gas consumers, who will subsequently pass on the increase to end-consumers by raising prices.
Manufacturers of steel, cement, and fertilizers are likely to increase their product prices, making inputs for crop production and construction materials even more expensive in the near future.
Despite these challenges, there was a slight decrease of 0.33% in weekly inflation compared to the previous week. This drop can be attributed to the decline in prices of chicken, onion, Irri-6/9 rice, banana, jaggery, masoor pulse, sugar, and mustard oil by 2% to 10.19% on a week-on-week basis.
Overall, the current inflationary pressures pose significant challenges for both consumers and businesses in Pakistan.
Source: [The Express Tribune](https://tribune.com.pk)
