SPI dips slightly amid mixed price trends

The Sensitive Price Indicator (SPI) for the period ended February 13, 2025 recorded a slight dip of 0.04% week-on-week, reflecting a mixed trend in prices of essential commodities.

The decline was primarily driven by falling prices of key food items including tomatoes, tea, onions and pulse gram.

Conversely, price hikes were noted in bananas, chicken, eggs and garlic. Sugar, mutton and powdered salt also registered a minor increase. Out of the 51 items tracked by the SPI, 13 items (25.49%) recorded a price hike, 15 items (29.41%) declined and 23 items (45.10%) remained stable.

The decrease of 0.04% in the index compared to the previous week was mainly driven by lower prices of essential food items, which included tomatoes (-8.80%), tea (-4.46%), onions (-3.97%) and pulse gram (-1.91%).

Notable declines were also observed in potatoes (-1.54%), pulse moong (-1.47%), liquefied petroleum gas (LPG, -0.86%), wheat flour and gur (-0.67% each), Irri-6/9 rice (-0.48%), broken Basmati rice (-0.47%) and 1kg vegetable ghee (-0.42%).

On the other hand, prices of several essential commodities spiked during the week under review. Bananas recorded the highest increase (+9.37%), followed by chicken (+3.62%), eggs (+2.38%) and garlic (+1.47%).

Prices of sugar (+0.76%), mutton (+0.47%), powdered salt (+0.39%), beef (+0.32%) and pulse mash (+0.21%) inched higher. Cooking oil (five litres), curd, fresh milk and powdered milk also registered a marginal increase.

On a year-on-year basis, the SPI increased 0.98%. The most significant price surge was observed in ladies' sandals (+75.09%), pulse moong (+29.15%), pulse gram (+27.87%), powdered milk (+25.84%), beef (+22.75%) and potatoes (+21.52%).

Bananas (+19.18%), garlic (+18.01%), 1kg vegetable ghee (+16.65%), Q1 gas charges (+15.52%), 2.5kg vegetable ghee (+14.65%), shirting (+14.11%) and mustard oil (+13.20%) also saw a notable hike.

Meanwhile, several commodities recorded a substantial price reduction, with onions leading the decline (-56.58%), followed by tomatoes (-48%) and wheat flour (-37.18%). Other essentials having a notable price decline included chilli powder (-20%), Q1 electricity charges (-18.92%), pulse mash (-11.42%), pulse masoor (-11.25%), eggs (-10%), broken Basmati rice (-8.83%) and Irri-6/9 rice (-7.35%).

The SPI's historical trend shows a significant decline in year-on-year inflation over the past few months. From September to mid-November 2024, the index remained in double digits, peaking around 16% to 17% in mid-October. However, in late November, it embarked on a sharp downward trajectory, dropping below 10% and continuing its decline. By January 2025, the SPI had fallen to around 2% to 3%, which reflected a steady easing of inflationary pressures.

Inflation expectations were volatile, said the monetary policy committee of the State Bank of Pakistan in the last policy statement, reiterating its earlier assessment that near-term inflation would remain volatile and was expected to increase close to the upper bound of the target range towards the end of FY25.