Weekly inflation reverses trend with 1.16% rise
photo: Reuters
The weekly inflation reading, measured by the Sensitive Price Indicator (SPI), rose 1.16% in the week ended December 7, 2023 due to increase in food and energy costs, reversing the downtick recorded in the previous two weeks.
Pakistan Bureau of Statistics (PBS) reported on Friday that on a year-on-year basis, the inflation surged 42.68% compared to the corresponding week of last year.
A major increase was observed in prices of onions which went up 8.42% compared to the prior week. Eggs got dearer by 2.52%, electricity charges for Q1 rose 2.03%, moong pulse prices increased by 0.88%, sugar 0.84%, bananas 0.67%, firewood 0.55%, liquefied petroleum gas (LPG) 0.42%, prepared tea 0.37%, masoor pulse 0.10%, mustard oil 0.09% and yogurt 0.02%.
Out of 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.
On a year-on-year basis, gas charges for Q1 spiked 1,109% compared to the corresponding week of last year. It was followed by cigarette prices that surged 94.20%, wheat flour up 85.05%, chilli powder 81.74%, garlic 73.09%, Basmati rice (broken) 68.53%, Irri Rice 6/9 60.94% and gents’ sponge chappal 58.05%.
Among other goods, prices of gents’ sandal rose 53.37%, gur 50.56%, Lipton tea 44.65% and mash pulse 44.04% year-on-year in the week under review, the PBS reported.
Inflation reading in Pakistan has continued to remain high, contrary to recent expectations of a deceleration. The latest inflation spike came in the wake of a massive increase of up to 193% in gas prices with effect from November 1, 2023.
Read: High food, energy prices keep inflation elevated
Earlier, the benchmark monthly inflation, measured by the Consumer Price Index (CPI), bounced back to 29.2% in November 2023, higher than market expectations of a rise of 28.5%.
The surge dashed hopes for an early and token reduction in the central bank’s policy rate next week (December 12). The policy rate has stood at a record high of 22% since end-June 2023.
The central bank, however, has stuck to its original forecast for average inflation at 20-22% for the current fiscal year. It said it had priced in the impact of the latest gas price hike, believing a deceleration in prices of other products would offset the impact of high gas tariffs in the average inflation reading.
The bank has projected a sharp decrease in inflation from January 2024 onwards.
Published in The Express Tribune, December 9th, 2023.
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