No relief as SPI stays in double digits

The Sensitive Price Indicator (SPI) registered a year-on-year increase of 13.52% for the week ended July 2, 2026, highlighting persistent inflationary pressures on essential commodities as substantial reductions in petroleum prices have yet to translate into meaningful relief for consumers.

According to the Pakistan Bureau of Statistics (PBS), the SPI, which tracks 51 essential items across 17 cities, stood at 354.24 for the combined consumption groups, reflecting a modest week-on-week (WoW) decline of 0.98%. While fuel prices drove much of the short-term easing, broader price levels, particularly for food items, continued to weigh heavily on low- and middle-income households.

The WoW decline was primarily driven by sharp drops in petroleum products: petrol prices fell 19.77%, high-speed diesel by 17.73%, and LPG by 12.60%. Other decreases were recorded in chicken (1.97%), bananas (1.44%), pulse moong (1.29%), pulse mash (0.84%), garlic (0.63%), pulse gram (0.23%), mustard oil, and sugar (0.21% each).

However, these declines were partially offset by significant increases in several food staples. Tomatoes surged 125.40%, onions rose 10.72%, potatoes 10.06%, eggs 8.32%, and wheat flour 5.08%. Other notable rises were observed in match boxes (0.96%), shirting (0.87%), washing soap (0.63%), fresh milk (0.49%), bread (0.47%), and Irri-6/9 rice (0.45%).

Out of 51 items, prices of 23 (45.10%) increased, 11 (21.57%) decreased, and 17 (33.33%) remained stable during the week.

On a year-on-year basis, the 13.52% spike in the SPI was led by sharp escalations in tomatoes (238.72%), onions (80.96%), wheat flour (68.47%), electricity charges for Q1 (49.14%), LPG (44.08%), gas charges (29.85%), gents' sponge chappal (16.69%), mutton (16.06%), chilli powder (15.20%), and beef (12.89%). Declines were noted in potatoes (-36.60%), pulse gram (-22.11%), sugar (-19.42%), and several pulses.

President of the Korangi Association of Trade and Industry (KATI), Muhammad Ikram Rajput, expressed concern that despite substantial reductions in petroleum prices, the benefits have yet to reach the general public, leaving low- and middle-income households under continued pressure from high inflation.

In a statement, Rajput said the public had expected prices of essential commodities to decline following the reduction in fuel prices. However, contrary to those expectations, transport fares, freight charges, and other costs that were previously increased on the pretext of higher petrol and diesel prices have not been revised downwards.

The impact of the latest SPI changes varied notably across different income groups. The lowest consumption quintile (Q1) recorded a week-on-week increase of 1.42% and a year-on-year rise of 14.13%. Q2 saw a 0.86% WoW increase and 16.11% YoY rise, while Q3 posted a modest 0.28% WoW rise alongside 13.67% YoY surge.

In contrast, Q4 experienced a 0.32% WoW decline with 12.77% YoY growth, and the highest quintile (Q5) witnessed the largest weekly relief at -2% WoW, although it faced an 11.68% YoY increase. Overall, the combined SPI reflected a 0.98% WoW decrease and 13.52% YoY rise. Lower quintiles continued to face relatively higher inflationary burdens compared to higher-income groups.

Furthermore, the Pakistani rupee posted a marginal gain of 0.01% against the US dollar in the inter-bank market on Friday, closing at 278.12, up Rs0.03 from Thursday's 278.15.

The greenback was on track for its biggest weekly drop in nearly three months after a soft June jobs report delayed Fed rate hikes, easing pressure on the yen.

Meanwhile, gold prices in Pakistan rose sharply on Friday, mirroring gains in the global market. According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola climbed to Rs440,936, registering a significant increase of Rs12,200 during the day.

Similarly, the 10-gram gold was quoted at Rs378,031 after rising by Rs10,459. On Thursday, the per-tola gold had closed at Rs428,736 following a gain of Rs9,100. Internationally, gold prices jumped $122 to reach $4,185 per ounce. Meanwhile, silver prices also advanced, increasing by Rs319 to settle at Rs6,764 per tola.