The short-term inflation rate, measured through the Sensitive Price Indicator (SPI), slowed down 0.34% week-on-week because of a cheaper cost of food items in the week ended May 23, 2024, maintaining its downward streak for the sixth successive week.
Among essential commodities, prices of wheat flour, rice, chicken, onions, tomatoes, eggs and petrol fell compared to the previous week. SPI comprises 51 essential items and their data is gathered from 50 markets across 17 cities in the country.
Pakistan Bureau of Statistics (PBS) reported that the inflation rate surged 21.31% when compared with the corresponding week of last year, indicating that the year-on-year inflation remained elevated in double digits.
Topline Securities CEO Mohammed Sohail said in a short commentary that the SPI-based inflation had decreased 6% over the last six weeks. “Given this trend, the benchmark monthly inflation, measured by the CPI (Consumer Price Index), may also cool down in the coming months.”
Financial experts expect the CPI to decelerate to over two-year low at 13-13.5% in May 2024. This notable drop may encourage the central bank to make the first cut in policy rate in three years. At present, the policy rate is at a record high at 22%. The drop in the weekly inflation was led by the decrease in garlic price, which fell 7.87% to Rs508.81 per kg compared to Rs552.27 in the previous week.
It was followed by the lower chicken cost, which shrank 5.92% to Rs321.40/kg compared to Rs341.61/kg in the prior week.
Wheat flour cost 4.66% less at Rs1,818/20kg bag compared to Rs1,906.99/bag a week ago. Liquefied petroleum gas (11.67kg cylinder) became cheaper by 3.23% to Rs2,789.82 from Rs2,882.94.
Onion price slipped 1.99% to Rs97.03/kg in the week under review compared to Rs99/kg in the previous week.
Other commodities got cheaper up to 1.22% which included eggs, Basmati rice (broken), masoor pulse, Irri rice and firewood.
On the other hand, prices of some other commodities rose up to 0.5% including beef, energy saver, gram pulse, milk powder, prepared tea, mutton, gur (jaggery), shirting, cigarettes, curd and fresh milk.
Published in The Express Tribune, May 25th, 2024.
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