Weekly Inflation Surges by 1.16%, Reversing Previous Trends
Published on: December 9, 2023.
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Inflation in Pakistan Rises Due to Increase in Food and Energy Costs
The weekly inflation reading in Pakistan, measured by the Sensitive Price Indicator (SPI), increased by 1.16% in the week ended December 7, 2023. This rise was primarily driven by higher food and energy costs, reversing the downtick seen in the previous two weeks. According to the Pakistan Bureau of Statistics (PBS), inflation surged by 42.68% compared to the corresponding week of the previous year.
Food Price Increase
Several food items experienced price hikes during the week. Onions saw a significant increase of 8.42% compared to the prior week. Eggs became more expensive by 2.52%, moong pulse prices increased by 0.88%, and sugar prices rose by 0.84%. Additionally, other items such as bananas, firewood, liquefied petroleum gas (LPG), and prepared tea also witnessed price increases.
SPI Coverage
Out of the 51 items covered by the SPI, prices of 15 (29.41%) items increased, rates of 14 (27.45%) items decreased, and 22 (43.14%) items remained unchanged.
Year-On-Year Changes
Gas charges for Q1 spiked by a staggering 1,109% compared to the corresponding week of the previous year. Cigarette prices also surged by 94.20%, and wheat flour prices increased by 85.05%. Notably, Basmati rice (broken) saw a rise of 68.53%, while Irri Rice 6/9 experienced a significant increase of 60.94%. Various other goods, including gents’ sandal, gur, Lipton tea, and mash pulse, also saw notable year-on-year price increases.
Inflation Continues to Remain High in Pakistan
The inflation reading in Pakistan has remained high, contrary to recent expectations of a decrease. This latest spike in inflation comes after a substantial increase in gas prices, which rose by up to 193% from November 1, 2023. In November 2023, the benchmark monthly inflation measured by the Consumer Price Index (CPI) reached 29.2%, exceeding market expectations of a rise of 28.5%.
Central Bank’s Forecast
Despite the high inflation, the central bank has maintained its original forecast for average inflation at 20-22% for the current fiscal year. The bank believes that the impact of the gas price hike will be offset by a deceleration in prices of other products, leading to an overall decrease in inflation starting from January 2024.
Source: The Express Tribune
