In the past week ending November 8, 2023, the Sensitive Price Indicator (SPI) has surged to a seven-week high, registering a 0.73% inflation on a week-on-week basis. This increase has been attributed to a notable rise in food prices, reported by the Pakistan Bureau of Statistics (PBS).
Tomatoes marked the most substantial increase, climbing by 15.43% during this period, followed by a 4.47% surge in potato prices. Other significant rises were seen in the price of wheat flour at 2.36%, garlic at 2.16%, salt powdered at 1.82%, chicken at 1.60%, Lipton tea at 0.96%, georgette at 0.95%, bananas at 0.94%, and shirting at 0.58%.
Of the 51 items, 39.22% experienced price hikes, while 15.69% observed a decrease and 45.09% remained unchanged in price during the week.
Arif Habib Limited highlighted that the SPI reading soared by 0.73% in the reviewed week, marking the highest increase since September 21, 2023. Year-on-year comparisons depicted a staggering 29.86% increase in inflation readings from the same week in the previous year.
In yearly comparisons, energy and food prices showed hikes ranging from 50% to a substantial 108.50%. These increases encompassed items such as gas charges for Q1, cigarettes, chili powder, wheat flour, various types of rice, and garlic.
The financial markets anticipate sustained high inflation in November due to historical gaps in price increases, likely impacting December 2023 due to a low base effect.
The State Bank of Pakistan (SBP) acknowledged that surging gas prices could challenge inflation control but remains confident that these hikes may be counterbalanced by deceleration in other items. As a result, the central bank maintained its forecast for average monthly inflation at 20-22% for the fiscal year 2023-24, with an expected sharp drop in inflation from January 1, 2024. Contrarily, the Consumer Price Index (CPI) for October 2023 hit a 10-month low at 26.9%, contrasting the four-month high recorded in September 2023.
Published in The Express Tribune, November 11th, 2023.
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