Business

Short-term inflation slows to 26-month low

SPI reading decelerates to 18.41% compared to last year

Our Correspondent August 03, 2024

Men sell vegetables at their makeshift stalls at the Empress Market in Karachi, Pakistan.—REUTERS/FILEPHOTO

KARACHI:

Pakistan’s weekly inflation hit a new 26-month low as it decelerated to 18.41% in the week ended August 1, 2024 compared to the same week of last year. The reading, however, still remained elevated in double digits, severely impacting the consumers, particularly those falling in the low and middle-income groups.

According to the Pakistan Bureau of Statistics (PBS) data, the pace of inflation slowed down to 0.12% in the week under review when compared with the previous week following the reduction in food and energy prices.

With that, the four-week uptrend in the short-term inflation, measured by the Sensitive Price Indicator (SPI), came to an end.

The central bank claimed at the outset of the week that a downward trend in inflation had been observed in the wake of a tight monetary policy over the past three years. Though the bank has slashed its policy rate by 250 basis points in the last seven weeks to a 16-month low, the rate is still quite high at 19.5%. According to local research houses, the 18.41% year-on-year inflation is the lowest since June 2, 2022, when it stood at 20.04%.

Earlier, Finance Minister Muhammad Aurangzeb projected that the benchmark monthly inflation gauge, called the Consumer Price Index (CPI), would slow down and reach single digit in the coming months.

PBS reported that the pace of week-on-week inflation eased to 0.12% owing to a 15.80% fall in electricity charges for Q1 to Rs6.29 per unit compared to Rs7.47 in the previous week.

High-speed diesel got cheaper by 3.81% to Rs273.94/litre compared to Rs284.80/litre a week ago while petrol (super) cost 2.23% lower at Rs270.62/litre against Rs276.78/litre earlier.

The price of wheat flour (20kg bag) dipped 0.98% to Rs1,912.43 in the week under review.

Prices of other commodities increased up to 5.91% week on week, which included chicken, eggs, cooked daal, gram pulse, cooked beef, Basmati rice (broken), garlic, onion, shirting and liquefied petroleum gas.