Short-term inflation gauge slows by another 1%

Falling food, energy prices pull SPI down for 3rd week in a row

KARACHI:

The short-term inflation decelerated by another one percentage point week-on-week on the back of falling food and energy prices, maintaining its downward trend for the third consecutive week.

According to the Pakistan Bureau of Statistics (PBS), the inflation rate hit a two-year low at 24.37% in the week ended on May 2, 2024 compared to the corresponding week of last year.

However, the reading still remained high in double digits at nearly 25%, requiring the authorities to take administrative measures to control the unchecked hike in prices of many essential commodities.

The weekly inflation, measured by the Sensitive Price Indicator (SPI), covers movement in prices of 51 essential items whose data is gathered from 50 markets in 17 cities of the country.

Inflation slowed down by 1% on a week-on-week basis, led by lower prices of tomato, which dropped by 22.05% to Rs72.15 per kg compared to Rs92.56/kg in the previous week. It was followed by chicken prices, which decreased by 8.03% to Rs419.59/kg compared to Rs456.24/kg last week. Onion got cheaper by 7.71% to Rs156.80/kg compared to Rs169.90/kg a week earlier. Wheat flour cost 6.88% less at Rs2,061.94 per 20kg bag compared to Rs2,214.17 per bag earlier.

Prices of other essential commodities dropped up to 5.25% including bananas, diesel, chilli powder, liquefied petroleum gas, petrol, masoor pulse and moong pulse. However, prices of some other commodities increased up to 6.06% which included potatoes, salt powder, garlic, powdered milk, mutton, eggs, cigarettes, curd and beef.

During the week under review, out of 51 items, prices of 15 (29.42%) items increased, prices of 18 (35.29%) items decreased while prices of another 18 (35.29%) items stood unchanged compared to the previous week.

The year-on-year trend depicts an increase of 24.37% in the SPI with Q1 gas charges soaring by 570%, onion prices rising by 145.15%, tomato rates surging by 79.43% and garlic prices going up by 72.46%. Pakistan’s benchmark monthly inflation gauge, called the Consumer Price Index (CPI), hit a two-year low at 17.3% in April 2024. It was the fourth consecutive monthly drop.

Published in The Express Tribune, May 4^th, 2024.

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