Fuel and food items lift SPI by 0.27%

The Sensitive Price Indicator (SPI) for the week ended June 19, 2025 recorded an increase of 0.27% compared to the previous week, driven by higher prices of key food and energy items, according to data released by the Pakistan Bureau of Statistics (PBS).

Notable weekly increases were seen in liquefied petroleum gas (LPG, up 14.86%), potatoes (3.75%), diesel (3.10%), gur (2.25%), chicken (2.17%), sugar (2.13%), petrol (1.88%), mustard oil (1.12%), powdered milk (0.97%), broken Basmati rice (0.84%), cooked daal (0.68%) and prepared tea (0.39%).

Conversely, prices declined for eggs (-9.53%), tomatoes (-5.62%), garlic (-1.03%), pulse gram (-0.35%), 2.5kg vegetable ghee (-0.17%), five-litre cooking oil (-0.03%) and bananas and firewood (-0.01% each).

Out of 51 essential items monitored across 50 markets in 17 cities, prices of 23 items rose, eight fell and 20 remained unchanged.

On a year-on-year (YoY) basis, the SPI showed a decrease of 2.06%, with major drops in prices of onions (-63.22%), tomatoes (-56.11%), electricity charges for Q1 (-41.63%), garlic (-32.58%), pulse mash (-19.09%) and potatoes (-17.97%). However, significant annual increases were recorded in ladies' sandals (+55.62%), pulse moong (+28.90%), sugar (+26.19%), powdered milk (+25.93%) and LPG (+21.77%).

The weekly SPI serves as a key tool to gauge short-term price movements in essential commodities and to monitor inflationary trends across the country.

The SPI has shown mixed trends in recent weeks, with slight fluctuations influenced by petroleum price revisions and market demand dynamics. After experiencing declines earlier in May, the SPI has been gradually inching upwards since late May, indicating renewed inflationary pressures in both food and energy segments, according to data compiled by Optimus Capital Management.

Market observers suggest that the coming weeks may witness further volatility depending on global commodity prices and domestic supply conditions. The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) noted that inflation was expected to trend up and stabilise in the target range during FY26.

JS Global Research Head Muhammad Waqas Ghani noted that following a 3.5% YoY increase in May 2025, the monthly Consumer Price Index (CPI) was expected to stand at 3.1% in June.

The base effect is now fading, signalling a return to normalised price trends. This will take the FY25 average to 4.6%, down from the FY24 average of 23.9%.

Food inflation for June 2025 is expected to rise 2.8% on a YoY basis, which was 0.97% last year, owing to the dissipation of base effect. Nevertheless, price decreases in certain food items are likely to lead to a month-on-month (MoM) decline in food inflation. Housing, gas and electricity segment is projected to post a 4% YoY decline in June, primarily due to a reduction in electricity tariffs.

Core inflation is expected to clock in around 8.5% YoY in June 2025. It is pertinent to note that core inflation, which excludes food and energy items, has remained around 9-10% for the past many months. Urban core inflation was registered at 7.3% in May while rural core inflation was reported at 8.8%.