Short-term inflation reverses course with 1.28% hike

SPI-based inflation surges on back of higher food, energy prices

KARACHI:

The weekly inflation reading, measured through the Sensitive Price Indicator (SPI), reversed course as it rose 1.28% in the week ended July 4, 2024, thanks to the increase in food and energy prices.

The increase was in contrast to the slowdown seen in the previous week. According to the Pakistan Bureau of Statistics, the SPI-based inflation rose 23.59% compared to the corresponding week of last year.

The week-on-week surge was mainly driven by expensive tomatoes as their price spiked 70.77% to Rs203.52 per kg compared to Rs119.18/kg in the previous week. It was followed by wheat flour, priced 10.57% higher at Rs1,970.43/20kg bag compared to Rs1,781.99/bag last week.

The price of milk powder (Nido’s 390-gramme polybag) increased 8.90% to Rs928.07/pouch compared to Rs852.26/pouch earlier. Hi-speed diesel cost 3.58% more at Rs278.54/litre compared to Rs268.92/litre in the previous week.

The price of petrol went up 2.88% to Rs266.72/litre in the week under review compared to Rs259.25/litre in the prior week. In addition, price of other essential commodities rose up to 2.40% including chicken, LPG, garlic, masoor pulse and sugar.

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

During the week ended July 4, 2024, prices of 29 (56.86%) items increased, rates of five (9.80%) items decreased while prices of 17 (33.34%) items remained unchanged compared to the previous week.

The year-on-year hike of 23.59% in the SPI reading was led by gas charges for Q1, which soared 570% compared to the same week of last year. Tomatoes got costlier by 161.12%, onion price rose 79.04% and chilli powder rate increased 55% year on year. Other essential commodities recorded increase of up to 36.13% including garlic, gram pulse, salt powder, shirting, moong pulse, milk powder, gents sandal, mash pulse, beef, electricity charges and LPG.

Earlier, the benchmark monthly inflation reading, measured by the Consumer Price Index, rose 12.6% in June 2024 compared to a two-and-a-half-year low of 11.8% recorded in May 2024.