Weekly inflation continues to rise

Pakistan’s short-term inflation rate escalated 0.94% in the week ended June 20, 2024 because of the seasonal hike in food prices ahead of Eidul Azha, marking the fourth consecutive week of uptrend, the state statistics agency reported on Friday.

According to the Pakistan Bureau of Statistics (PBS), the Sensitive Price Indicator (SPI) spiked 23.78% when compared with the same week of last year.

The increase in the week-on-week inflation was led by the swelling prices of tomatoes, which became expensive by 65.84% to Rs159.44 per kg compared to Rs96.14/kg in the previous week. It was followed by potatoes, which became costlier by 5.61% to Rs97.90/kg compared to Rs92.70/kg last week.

Onion got dearer by 3.78% to Rs132.04/kg compared to Rs127.23/kg a week ago. Banana price rose 3.29% to Rs164.69/dozen compared to Rs159.44/dozen.

The price of liquefied petroleum gas (LPG) increased 2.44% to Rs2,872.29/cylinder of 11.67 kg compared to Rs2,803.88/cylinder in the prior week.

Prices of other essential commodities increased up to 1.67%, which included moong pulse, garlic, fresh milk, eggs, georgette and shirting.

The SPI comprises 51 essential items and their data is collected from 50 markets across 17 cities in the country.

During the week under review, out of the 51 items, prices of 25 (49.02%) items went up, rates of five (9.80%) items decreased while prices of 21 (41.18%) items remained unchanged compared to the previous week.

Like the SPI, the benchmark monthly inflation gauge, called the Consumer Price Index (CPI), may also surge again for a couple of months in the backdrop of increase in taxes in the federal budget for fiscal year 2024-25.

Earlier, the CPI decelerated to two-and-a-half-month low of 11.8% in May compared to 17.3% in the prior month and the multi-decade high of 38% in May 2023. The central bank has projected a reduction in inflation rate to around 12% in the next fiscal year beginning July 2024 compared to the range of 23-25% in the outgoing fiscal year.

The significant fall in inflation in May prompted the central bank to make the first cut in its policy rate in four years. The rate was pushed down 1.5 percentage points to 20.5% on June 10.

On a year-on-year basis, the increase of 23.78% in the weekly SPI was led by gas charges for Q1, which rose 570% compared to the same week of last year.

Tomato cost 191% more while onion got dearer by 122.66%. Chilli powder price rose 54.81%, garlic 40.55%, shirting 30.75% and salt powder 29.49%.

Gents’ sandal price went up 25.01%, gram pulse 22.67%, mash pulse 22.60%, beef 22.12% and electricity charges for Q1 21.46% in the week under review compared to the same week of last year.