Weekly inflation rises on food, energy prices

KARACHI: Soaring prices of food and LPG pushed weekly inflation up 0.17 percent week-on-week and 34.83 percent year-on-year during the seven-day period ended February 9.

Pakistan Bureau of Statistics (PBS) data issued on Friday attributed the WoW rise in SPI to the increase in prices of potatoes (7.15 percent), chicken (6.94 percent), bananas (6.53 percent), vegetable ghee 1kg (5.67 percent), broken basmati rice (3.80 percent), rice irri-6/9 (3.64 percent), vegetable ghee 2.5kg (2.71 percent), cooking oil 5kg (2.60 percent), pulse mash (2.42 percent) garlic and pulse moong (2.20 percent) each, LPG (3.06 percent) and cigarettes (2.25 percent). On the other hand decrease was observed in the prices of onions (9.83 percent), tomatoes (5.40 percent), eggs (3.40 percent), wheat flour (2.71 percent) and sugar (0.31 percent).

Price of 11.67kg LPG cylinder continued to rise 3.06 percent WoW and 50.41 percent YoY, raising the miseries of the lower and middle income groups. A cylinder was priced at Rs3,500 each during the week under review; up Rs103.87 from last week’s Rs3,396.85 and up Rs1,173.24 from last year’s Rs2,327.48/cylinder. Fahad Rauf, head of research at Ismail Iqbal Securities, said that SPI increased mainly due to an increase in chicken prices, but since onion prices declined, it “contained the increase in inflation”. Chicken prices have continued to spiral mainly due to disruption in soybean feed supply chain. According to news reports, over 50 percent of poultry farms have been closed due to shutdown of broiler feed mills.

The inflationary pressures are expected to intensify as the government would likely make adjustments to unlock the IMF programme, Rauf noted.

For the groups spending Rs17,733-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175; WoW SPI increased 0.02, 0.10, 0.14, and 0.22 percent, respectively. However, it declined for those spending up to Rs17,732 to stand down 0.06 percent.

On YoY basis, for these groups, SPI recorded an increase of 31.56, 32.55, 34.86, 36.36, and 35.83 percent, respectively.

This showed that on WoW basis, SPI had the highest impact on those spending more than Rs44,175, whereas the YoY impact was faced the most by those whose spending capacities were between Rs29,518 and Rs44,175.

PBS data attributes different weightages to the commodities in the SPI basket. For the group with the lowest spending capacity, commodities with the highest weights include milk (17.5449 percent), electricity (8.3627 percent), wheat flour (6.1372 percent), sugar (5.1148 percent), firewood (5.0183 percent), long cloth (4.2221 percent), and vegetable ghee (3.2833 percent).

Of these commodities, prices of milk, vegetable ghee and firewood went up; wheat flour and sugar prices declined; whereas price of electricity and long cloth remained the same.

SPI was recorded at 228.17 points against 227.79 points registered last week and 169.23 points recorded during the week ended February 10, 2022.