Following four consecutive weeks of increase in the short-term inflation, the weekly inflation reading, measured through the Sensitive Price Indicator (SPI), edged down 0.03% because of a decline in food prices in the week ended November 28, 2024.
Pakistan Bureau of Statistics (PBS) reported that the inflation rate decreased 0.03% compared to the previous week. Additionally, the year-on-year (YoY) reading remained close to a six-year low of 5.13% during the week under review.
Arif Habib Limited Research Head Tahir Abbas told The Express Tribune that the YoY inflation had been the lowest since April 2018 when it was recorded at 3.96%.
He said the trend would continue and it may go slightly up in December and in May 2025 it would pick up due to the low base. However, the inflation will remain range bound at less than 9% for fiscal year 2024-25. Average inflation will come in at 7.6% for the entire FY25.
Furthermore, the State Bank of Pakistan (SBP) is expected to cut its policy rate by 1.5 basis points, therefore, by the end of the current fiscal year, the policy rate would reach 12%, he said.
The SPI for the week ended November 28, 2024 dipped 0.03% owing to a major decrease observed in prices of chicken, which fell 3.78% to Rs357.54/kg, tomatoes, which dropped 2.23% to Rs186.05/kg, gram pulse became cheaper by 1.60% to Rs387.88/kg, masoor pulse by 1.38% to Rs301.60/kg and Basmati rice (broken) by 1.15% to Rs205.15/kg. The SPI declined also because of the fall in prices of gur (0.59%), mash pulse (0.53%) and moong pulse (0.25%).
On the other hand, a major increase was observed in prices of potatoes, which went up by 3.34% to Rs116.21/kg, garlic by 1.69% to Rs677.85/kg, bananas by 1.13% to Rs117.64/kg, vegetable ghee (2.5kg pack) by 0.99% to Rs1,382.57 and vegetable ghee (1kg pack) by 0.93% to Rs557.58.
Among other products, mustard oil rose by 0.91%, cooking oil (five-litre pack) by 0.77%, eggs by 0.65%, washing soap by 0.53% and liquefied petroleum gas (LPG) by 0.20%.
During the week under review, out of 51 items, prices of 12 items, having 23.53% weight, increased, rates of nine items, constituting 17.65%, decreased and prices of 30 items, accounting for 58.82%, remained stable.
The YoY inflation was mainly driven by ladies' footwear, which became costlier by 75.09% to Rs1,399, gram pulse, which rose by 66.40% to Rs387.88/kg, tomatoes, up by 42.08% to Rs186.05/kg and moong pulse, up by 38.38% to Rs385.05/kg.
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