Food prices push inflation to 1.73% YoY

The Sensitive Price Indicator (SPI) for the week ended August 7, 2025 recorded an increase of 1.73% year-on-year (YoY) and 0.05% week-on-week (WoW), according to data released by the Pakistan Bureau of Statistics (PBS).

The SPI, which monitors the price movement of 51 essential commodities in 50 markets across 17 cities, is a key gauge of short-term inflationary trends. During the week under review, prices of 12 items (23.53%) increased, 12 items decreased and 27 items (52.94%) remained unchanged.

On a weekly basis, the major price increase was observed in onions (+16.53%), tomatoes (+10.17%), chicken (+4.12%), eggs (+1.32%), diesel (+0.52%), pulse masoor (+0.34%), prepared tea (+0.31%), mustard oil (+0.20%), cigarettes (+0.12%), firewood (+0.08%) and fresh milk (+0.05%).

Analysts attribute the sharp rise in onion and tomato prices to seasonal supply constraints and higher transportation costs.

Conversely, a notable decline was recorded in prices of liquefied petroleum gas (LPG, -3.21%), petrol (-2.75%), bananas (-1.56%), pulse moong (-1.09%), pulse mash (-1.07%), potatoes (-0.44%), sugar (-0.37%), garlic (-0.36%), broken Basmati rice (-0.28%) and wheat flour (-0.24%).

The drop in fuel prices provided some relief to consumers, although it was offset by rising food costs in other categories.

From the consumption group perspective, the WoW change was most pronounced for the lowest income quintile (Q1), where the SPI rose 0.30%, followed by Q2 (+0.26%), Q3 (+0.19%) and Q4 (+0.14%). The highest income group (Q5) saw a slight decline of 0.06%, indicating that lower-income households bore the brunt of recent price increases.

On an annual basis, the 1.73% YoY rise in the SPI was driven by a significant increase in prices of ladies' sandals (+55.62%), gas charges for Q1 (+29.85%), sugar (+21.75%), beef (+14.15%), 2.5kg vegetable ghee (+12.20%), pulse moong (+12.09%), 1kg vegetable ghee (+11.58%), firewood (+11.22%), gur (+10.94%), cooked beef (+9.31%), bananas (+9.29%) and printed lawn (+7.32%).

In contrast, a steep annual decline was noted in onions (-55.34%), garlic (-26.43%), pulse mash (-22.99%), wheat flour (-22.01%), tomatoes (-21.42%), Lipton tea (-17.93%), potatoes (-16.91%), electricity charges for Q1 (-10.02%), pulse gram (-9.87%) and LPG (-5.68%).

Economists say the mixed price movement highlights the interplay between seasonal supply cycles, fuel price fluctuations and base effects from last year's elevated prices. While fuel price cuts have helped ease broader inflationary pressures, persistent food price volatility — particularly in perishable items — continues to affect household budgets, especially for lower-income groups.