Inflation hits four-week high
Pakistan’s weekly inflation, measured by the Sensitive Price Indicator, rose by a four-week high rate of 0.81% in the week ending Jan 4, 2024, according to the PBS. The stubborn inflation is primarily attributed to a surge in food prices during the week, significantly impacting economic growth.
YoY, the inflation rate recorded a staggering increase of 42.86%, with a substantial rise (of 1,180.58%) in pipelined gas prices being the primary driver. Out of 51 items, prices of 19 increased, 9 decreased, and 23 remained unchanged during the week. Tomatoes experienced a notable surge of 16.04%, followed by a 13.98% increase in chicken prices.
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Despite efforts, Pakistan has struggled to curb inflation, partly due to rising commodity prices in global markets, affecting its imports. The benchmark monthly inflation spiked by 29.7% in Dec 2023, surpassing the government’s projection of 27.5-28.5%, driven by increases in power prices and the housing index. Monthly inflation in the first half of FY24 hovered around 30%, exceeding the SBP’s initial forecast of 20-22% for the full year. The government’s decision to raise gas tariffs by up to 193% in Nov 2023 also contributed to inflationary pressure.
Published in The Express Tribune, January 6th, 2024.
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