Weekly inflation shows minor rise

YoY inflation stands at 3.71%, highlights cost-of-living challenges for households

KARACHI:

After two consecutive weeks of decline, weekly inflation, measured by the Sensitive Price Indicator (SPI), increased slightly by 0.07% for the week ending December 12, 2024, marking a marginal rise compared to the previous week.

Prices of several items saw increases during the week. Among food items, chicken experienced the highest rise at 3.80% to Rs334.38/kg, followed by vegetable ghee (2.5 kg) at 2.27% to Rs1,438.20, bananas at 1.99% to Rs120.55/dozen, and potatoes at 1.93% to Rs120.45/kg. Other notable increases included mustard oil (1.07%), cooking oil (5 litres) (0.98%), and vegetable ghee (1 kg) (0.52%). Non-food items also witnessed slight increases, such as washing soap (0.80%), energy saver bulbs (0.31%), and LPG (0.28%)

Conversely, several essential items saw price reductions. The most significant declines were recorded in onions (-3.58%) to Rs146.66/kg, tomatoes (-3.10%) to Rs134.94/kg, and eggs (-2.14%) to Rs347.69/dozen. Other items, such as garlic (-1.58%), pulse gram (-1.19%), and rice IRRI-6/9 (-0.75%), also experienced price drops. Additionally, non-food items like firewood saw a minor decrease of 0.16%.

"The data reflects a relatively stable pricing environment for essential goods and services," said Sana Tawfiq, Head of Research at AHL. The SPI food basket showed a 0.2% decline week-on-week, with notable reductions in chicken prices by 12% and tomatoes by 17%, as adequate supply met demand. However, with winter setting in, items like eggs and other poultry products are expected to see price increases in the coming weeks. Household items also saw a decline of 0.6%, reflecting improved availability and reduced costs, she added.

The SPI remained largely flat with no significant increase for the week, said Maaz Azam, Research Head at Optimus Capital. Energy and food prices witnessed a decline, partly attributed to the base effect of a gas price increase introduced in November last year, which added around two percentage points to inflation.

Out of the 51 monitored items, prices of 18 items (35.29%) increased, 11 items (21.57%) decreased, and 22 items (43.14%) remained stable, indicating minimal week-on-week volatility in essential commodity prices.

Year-on-year (YoY) analysis highlights an overall SPI increase of 3.71% compared to the same period last year. Significant YoY price hikes include ladies' sandals (75.09%), pulse gram (59.55%), and potatoes (36.16%), reflecting persistent inflation in certain categories. Conversely, some items, such as wheat flour (-35.88%), chili powder (-20.00%), and diesel (-10.77%), registered notable price reductions over the year.

In conclusion, the SPI for the week depicts a stable week-on-week trend, with minor fluctuations in prices. However, the year-on-year data points to ongoing inflation in key food and non-food items, underscoring the cost-of-living pressures on households.