Inflation slows to 22-week low

Significant decrease in vegetable prices pulls down SPI reading

KARACHI:

The inflation reading, measured by the Sensitive Price Indicator (SPI), decelerated to a 22-week low at 1.31% in the week ended March 21, 2024 following a notable drop in prices of tomato and onion.

The easing of inflation compared to the previous week ended a four-week rising streak, which came in the wake of suspension of onion exports during Ramazan and ahead of the arrival of a new crop next month.

According to data gathered by the Pakistan Bureau of Statistics (PBS), the inflation level came down from the nine-week high of 1.35% recorded in the prior week.

When compared with the corresponding week of last year, the pace of inflation slowed down to a 27-week low at 29.06%, but it still remained elevated and has been in double digits for a very long time.

According to the PBS, tomato prices decreased by 36.73% to Rs105.40 per kg in the week under review compared to Rs166.58 per kg in the previous week. It was followed by onion prices that dropped 19.58% to Rs202.31 per kg compared to Rs251.58 per kg in the prior week.

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Potatoes cost 4.02% less as their price dipped to Rs67.30/kg compared to Rs70.12/kg earlier. Garlic became cheaper by 2.87% to Rs599.40/kg compared to Rs617.15/kg in the previous week. Prices of other essential commodities which included mash pulse, wheat flour, sugar, masoor pulse and diesel decreased up to 1.25%.

A leading onion exporter recently told The Express Tribune that the government had banned the commodity’s export for one month until April 15 to arrest its skyrocketing prices and stabilise local markets.

Besides, he said, the new crop of onion would arrive in April, which would play a major role in bringing down its prices. Tomato prices have also come down significantly after an increase in its supply compared to the prevailing demand.

However, prices of some other essential commodities listed in the SPI basket rose during the week ended March 21, 2024, led by liquefied petroleum gas (LPG), which became expensive apparently in the face of establishment of a black market.

Published in The Express Tribune, March 23^rd, 2024.

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