Weekly inflation spikes nearly 1%

The weekly inflation, as measured by the Sensitive Price Indicator (SPI), resumed its uptrend in the week ended on September 21, after registering some decrease in the prior week.

Inflation went up by almost 1% owing to a surge in food and petroleum product prices.

The Pakistan Bureau of Statistics (PBS) reported on Friday that inflation rose by 0.93% in the week ended on September 21, 2023 compared to the prior week, when the reading fell by 0.25%.

Significant spikes were observed in prices of food items. Chicken became costlier by 8.49% compared to the previous week. Similarly, the garlic price went up by 5.19% and onion rate rose by 3.02%.

Among non-food items, the petrol price soared by 8.51%, diesel went up by 5.54% and shirts and match boxes got costlier by 1.81% and 1.42% respectively.

Throughout the week, out of the 51 items covered by SPI, prices of 22 (43.14%) items increased, 11 (21.57%) items decreased and 18 (35.29%) items stood unchanged, according to the PBS report.

The year-on-year (YoY) inflation reading showed a hefty increase of 38.66% in the week under review compared to the same week of last year. Key contributors to the YoY surge included a steep rise of 118.16% in electricity charges for first quarter, 108.38% increase in gas charges for Q1, 94.69% rise in cigarette price and 88.43% increase in Basmati rice (broken) price.

Moreover, the chilli powder became expensive by 84.84%, sugar rose by 81.98%, Irri-6/9 rice 81.04%, wheat flour 73.70%, gur 72.86%, Lipton tea 65.28%, sponge chappal (gents) 58.05%, powdered salt 56.48%, sandal (gents) 53.37%, powdered milk 43.33% and garlic 43.10% compared to the same week of the previous year.

The high inflation has slowed down economic activities significantly as price stability is a must for the revival of growth.

According to the Asian Development Bank (ADB)’s latest report, inflation in Pakistan will remain elevated at 25% in the current fiscal year compared to the SBP’s projection of 21-22%.

The ADB anticipated that the central bank would further increase its policy rate to control the high inflation. However, it would be another hit to the economy as high cost would make it difficult for businesses to run their operations.

Published in The Express Tribune, September 23^rd, 2023.

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