Weekly inflation increases on higher food, energy prices

KARACHI: Major increase in energy and food prices pushed Pakistan’s weekly inflation up 1.30 percent and annualised inflation up 29.83 percent during the period ended August 3, official data showed on Friday.

The Pakistan Bureau of Statistics (PBS) data attributed the increase in the sensitive price indicator (SPI) to increase in the prices of tomatoes (16.85%), LPG (9.82%), petrol (7.86%) and diesel (7.82%), chilli powder (7.58%), garlic (5.71%), onion (5.50%), powdered milk (5.17%), eggs (3.86%) and broken basmati rice (2.06%).

On the other hand major decrease was observed in the prices of mustard oil (1.63%), chicken (1.40%), vegetable ghee 1kg (0.51%), vegetable ghee 2.5kg (0.36%), pulse gram (0.22%), wheat flour (0.20%) and pulse moong (0.03%). For the week under review, SPI was recorded at 271.56 points against 268.08 points registered last week and 209.17 points recorded during the week ended August 8, 2022. PBS compiles SPI via collecting prices of 51 essential items from 50 markets in 17 cities of the country. During the week, out of 51 items, prices of 23 (45.10 percent) items increased, 7 (13.72 percent) items decreased and prices of 21 (41.18 percent) items remained unchanged.

Different weightages are assigned to various commodities in the SPI basket. Commodities with the highest weights for the lowest quintile 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, the price of milk, sugar and firewood went up; wheat flour, and vegetable ghee decreased; whereas prices of long cloth, and electricity remained unchanged.

Sakina, a homemaker from North Nazimabad said that she does not know how to cater the food needs of her children, particularly meat. “Chicken is Rs600/kg at my local shop, beef is more than Rs1,100 and mutton – I have not even bothered checking its price,” she lamented, while adding that just 250 grams of tomatoes cost Rs50, which means straight up Rs200/kg.

“With growing kids, running the kitchen in a single and meagre salary has become close to impossible,” she shared sadly.

For the groups spending up to Rs17,732; Rs17,733-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175; YoY SPI increased 28.48, 26.47, 31.69, 33.00, and 31.40 percent respectively.

The YoY trend depicts increase of 29.83 percent, on account of rising prices of wheat flour (131.40 percent), cigarettes (109.57 percent), gas charges for Q1 (108.38 percent), tea (97.71 percent), broken basmati rice (82.86 percent), rice irri-6/9 (73.73 percent), tomatoes (67.54 percent), chili powder (66.74 percent), sugar (64.12 percent), chicken (60.51 percent), gents sponge chappal (58.05 percent), gur (57.75 percent), and potatoes (55.75 percent).

Commodities that registered YoY decline in prices included onions (37.10 percent), electricity for Q1 (18.06 percent), pulse masoor (15.07 percent), and vegetable ghee 1kg (1.13 percent).

A working woman, wishing to remain anonymous, said that her father had taken a bank loan. “Since the interest rates have been increased by the central bank, paying the instalment takes up a major chunk of our combined income,” she said, sharing that for a day this week her family had no wheat flour at home to make roti. “We used to be a regular middle class family, but I feel we are now poor,” she said.

Analysts recently said that the central bank decision to hold interest rate at 22 percent was justified despite the increase in petroleum prices to meet IMF-set fiscal objectives and July’s higher-than-expected consumer price index inflation.

The central bank of Pakistan kept its policy rate unchanged as it anticipates a decline in inflation over the coming months.