Weekly inflation surges 29.6%

Consumers see price spikes despite surplus agricultural produce

KARACHI:

The weekly inflation, measured by the Sensitive Price Indicator (SPI), surged 29.65% in the week ended October 26, 2023 compared to the corresponding week of last year, driven primarily by higher prices of energy and food items.

Pakistan Bureau of Statistics (PBS) reported that the largest contribution to the weekly inflation came from the 108.38% increase in gas prices in the first quarter of financial year 2023-24, followed by 94.46% rise in cigarette costs.

Chilli powder became expensive by 84.11%, Basmati rice (broken) got dearer by 78.51%, wheat flour price rose 77.49%, sugar 63.22%, Irri-6/9 rice 62.83%, gents sponge chappal 58.05%, jaggery (gur) 57.73% and powdered salt 54.84% in the week under review as compared to the corresponding week of last year.

Over the past many months, Pakistani consumers have seen continued price spikes for essential commodities like wheat flour, rice and sugar, despite a bumper wheat harvests and surplus production of rice and sugar.

With the improved agricultural produce, the need for wheat imports has gone down while traders are poised to export a large quantity of rice and some sugar as well later in the year.

Read High food, energy prices keep inflation elevated

However, the surplus production has not brought price stability in local markets, prompting many to question the effectiveness of government’s price control measures and policies promoting the export of commodities.

Experts projected that inflation would continue to remain perched at higher levels following a further increase of up to 193% in gas prices with effect from November 1, 2023.

It will increase the cost of goods for a large number of industrial and commercial gas consumers, who would, in turn, pass on the increase to end-consumers by raising prices of their goods.

Steel, cement and fertiliser manufacturers are particularly expected to revise their product prices upwards, making inputs for crop production and construction material further expensive in the near future.

PBS, however, reported that the weekly inflation ticked down 0.33% when compared with the preceding week.

The drop came on the back of decrease in prices of chicken, onion, Irri-6/9 rice, banana, jaggery, masoor pulse, sugar and mustard oil in the range of 2% to 10.19% on a week-on-week basis.

Published in The Express Tribune, October 28^th, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.