Weekly inflation surges to record 4.13pc as energy, food prices spike

ISLAMABAD: The weekly inflation, measured by the Sensitive Price Indicator (SPI), posted a record increase of 4.13 per cent for the combined income group on a week-on-week basis for the period ending Oct 27 mainly due to the highest-ever energy and food prices, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

After rebasing, the SPI recorded the second highest week-on-week increase of 3.68pc on Sept 22 driven by an increase in fuel adjustment prices in the electricity bills of consumers.

On a year-on-year basis, the weekly inflation recorded an increase of 30.68pc. The annual increase in SPI has been on the decline for some time, falling from a peak of 45.5pc in the week ending Sept 1. Other notable mentions: 44.6pc (Aug 25), 42.7pc (Sept 8), 42.3pc (Aug 18). Prices rose at such a fast pace recently on the back of surging food and fuel prices.

A World Bank report estimated that the average Consumer Price Index (CPI)-based inflation in Pakistan would rise to 23pc in the current fiscal year from 12.2pc a year ago due to higher domestic energy prices, flood disruptions and a weaker rupee.

The SBP has been tightening its monetary policy to contain surging inflation and the rupee’s rapid depreciation. Since September 2021, the central bank has increased the policy rate by a cumulative 800bps to 15pc, the highest rate since the 2008 global financial crisis.

Soaring vegetable prices due to damage to the standing crops and a massive hike in electricity rates have also contributed to pushing up inflation.

The International Monetary Fund said in its country’s staff report that the average Consumer Price Index (CPI) inflation was expected to surge to 20pc in the current financial year, while core inflation would also remain elevated due to higher energy prices and the rupee’s decline.

The PMLN-led coalition government has projected a modest inflationary annual target of 11.5pc for the ongoing fiscal year. The government revived the Monitoring Price Committee headed by Planning Minister Ahsan Iqbal which convened only one meeting after its revival, clearly showing the government’s seriousness.

The SPI monitors the prices of 51 essential items based on a survey of 50 markets in 17 cities across the country. During the week under review, the prices of 21 out of 51 items increased, 16 decreased, and 14 remained stable.

In the food group, the items that saw the highest week-on-week increase in prices include powdered salt (2.57pc), tea Lipton (1.89pc), rice Irri-6/9 (1.24pc) and garlic (1.04pc).

In the non-food group, on a week-on-week basis, the electricity price increased (89.34pc), energy saver (1.57pc) and firewood (1.31pc).

On a year-on-year basis, the items whose prices jumped the most included onions (177.37pc), tomatoes (84.17pc), diesel (74.51pc), pulse gram (64.73pc), petrol (62.75pc), cooking oil 5 litre (55.13pc), washing soap (54.97pc), pulse moong (54.19pc), pulse masoor (52.33pc), vegetable ghee 2.5 Kg (52.31pc), gents sponge chappal (52.21pc), mustard oil (50.97pc), pulse mash (50.08pc) and vegetable ghee 1 Kg (49.44pc).

Published in Dawn, October 29th, 2022

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