Food prices drive up inflation

SPI increases 12.8% year-on-year, up from 3-year low in prior week

KARACHI:

The weekly inflation, measured through the Sensitive Price Indicator (SPI), increased 0.05% in the week ended September 26 owing to a hike in food prices, partially reversing the slowdown recorded in the previous week.

According to the Pakistan Bureau of Statistics' (PBS) data, the inflation rate rose 12.80% when compared with the same week of last year, which was up from a three-year low of 12.72% year-on-year hit in the preceding week.

The relatively higher inflation has eroded the disposable income of ordinary people and made the cost of living expensive, particularly for those sitting at the bottom of the pyramid and counted among the low income groups.

The SPI comprises 51 essential commodities, for which the PBS gathers price data from 50 markets across 17 cities in the country.

During the week ended September 26, prices of 16 (31.37%) items increased, rates of nine (17.65%) items decreased and prices of 26 (50.98%) items remained unchanged compared to the previous week.

The week-on-week inflation ticked up 0.05% primarily on the back of surge in prices of tomatoes, which became costlier by 5.78% to Rs123.67 per kg compared to Rs116.91/kg in the previous week. It was followed by onion, which got expensive by 5.49% at Rs151.64/kg compared to Rs143.75/kg last week. Gram pulse rose 1.01% to Rs397.36/kg compared to Rs393.39/kg in the prior week. Potatoes cost 0.94% more at Rs102.55/kg compared to Rs101.59/kg. Gur (jaggery) price went up 0.82% to Rs220.41/kg in the week under review compared to Rs218.61/kg in the preceding week.

Prices of other commodities increased up to 0.64% which included firewood, cooked daal, curd, fresh milk and liquefied petroleum gas.

The 12.80% year-on-year surge in the SPI reading was mainly triggered by Q1 gas charges, which swelled 570%, followed by gram pulse that became expensive by 60.21%. Rates of other essential commodities spiked up to 51.72% including tomatoes, beef, milk powder, shirting, chicken, cooked daal, salt powder, georgette and energy savers.