Weekly inflation declines amid drop in food prices

Weekly inflation decreased by 0.73% in the week ending June 27, 2024, primarily due to a drop in food prices, halting the four-week rise in short-term inflation amid Eidul Azha.

According to Pakistan Bureau of Statistics (PBS) data, the weekly inflation rate remained high on a year-on-year basis, rising by 22.88% compared to the same week last year. Financial experts anticipate that the benchmark monthly inflation rate will rise to 12.9% for June 2024 due to increases in power and food prices around the Eid festival. In May 2024, the rate had hit a two-and-a-half-year low of 11.8%.

The short-term inflation, measured through the Sensitive Price Indicator (SPI), includes 51 essential items collected from 50 markets in 17 cities across the country. During the week, prices of 18 items (35.29%) increased, 8 items (15.69%) decreased, and 25 items (49.02%) remained unchanged compared to the previous week.

Tomatoes led the drop in weekly inflation, decreasing by 25.25% to Rs119.18/kg compared to Rs159.44/kg the previous week. Chicken (farm broiler live) prices fell by 14.20% to Rs313.31/kg compared to Rs365.17/kg the prior week. Onion prices reduced by 3.90% to Rs126.89/kg compared to Rs132.04/kg, while garlic declined by 2.80% to Rs464.95/kg compared to Rs478.35/kg. Plain bread (small size) slipped by 0.81% to Rs110.75 compared to Rs111.66 the previous week. Other food items, including rice basmati broken, eggs, and rice irri, saw reductions of up to 0.15%.

However, increases were observed in the prices of LPG (5.38%), pulse gram (4.72%), pulse moong (3.20%), cooked daal (1.87%), pulse masoor (1.79%), potatoes (0.99%), gur (0.87%), bananas and wheat flour (0.61% each), pulse mash (0.32%), and firewood (0.20%), according to PBS data.

The year-on-year trend shows a 22.88% increase in the inflation rate, with gas charges for Q1 surging by 570%.