Inflation hits seven-week high

Hits 1.6% as SPI records inflation at 44.16% for the week

KARACHI:

In the week ending on Thursday, Pakistan witnessed a surge in weekly inflation, reaching a seven-week high at 1.36%. The Pakistan Bureau of Statistics reported that the Sensitive Price Indicator recorded the inflation reading at 44.16% for the week compared to the same week last year.

On a week-on-week basis, essential commodities experienced notable price hikes. Tomatoes became costlier by 15.6%, reaching an average of Rs143.60/kg, while onions surged 8.9% to Rs210.71/kg. Chicken Farm Broiler (Live) rose by 6.4% to Rs436/kg, and farm eggs increased by 4.31% to Rs416.74/dozen.

Additionally, utility costs contributed to the inflationary pressures, with electricity charges for Q1 increasing by 5.11%. Other items that experienced price hikes included matchboxes (2.56%), gur (2.30%), LPG gas (2.29%), pulse gram (2.11%), energy saver (1.40%), pulse mash (0.83%), and rice irri-6/9 (0.67%).

Out of 51 items, 21 witnessed price increases, 8 saw decreases, and 22 remained unchanged during the week. The year-on-year trend showed a significant increase of 44.16%, largely influenced by a substantial surge in gas prices, which rose by 1108.59%, according to PBS.

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Tomatoes saw a staggering year-on-year increase of 155.83%, contributing to the overall inflationary trend. Other products that experienced price hikes ranging from 93% to 47% included cigarettes, chili powder, garlic, men’s sponge chappal, sugar, wheat flour, men’s sandal, rice irri-6/9, gur (50.58%), and rice basmati broken.

The annual inflation rate in Pakistan rose to a three-month high of 29.7% in December 2023 from 29.2% in November, according to Tradingeconomics.com. This increase was attributed to IMF-backed hikes in energy costs and a weak currency, coupled with additional taxes implemented to maintain the IMF bailout. The IMF anticipates a slowdown in the benchmark monthly inflation reading to 18.50% by the end of the current fiscal year on June 30, 2024. However, the monthly average inflation for the full fiscal year is expected to remain elevated at 24%, reflecting persistent inflation in the first half of FY24.

Published in The Express Tribune, January 13^th, 2024.

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