Weekly inflation stays at six-month high on food, gas prices

ISLAMABAD: Weekly inflation rate remained at a six-month high of 43.16 percent in the week ending on December 14, as soaring food prices continued to squeeze consumers, official data showed on Friday.

The main drivers of the inflation were food items, especially sugar, pulses, eggs, and rice, which saw sharp increases in their prices over the year. The Sensitive Price Indicator (SPI) inched down by 0.06 percent week-on-week from the previous week, according to the Pakistan Bureau of Statistics (PBS). 

This was the highest level since the week ending on June 1, when the SPI inflation was 43.17 percent.

It was also the fifth consecutive week that the SPI inflation stayed above 40 percent. For the week ending November 16, SPI was at 41.9 percent, November 23 (41.13 percent), November 30 (41.06 percent), December 7 (42.68 percent), and now at 43.16 percent.

The country is facing severe inflationary pressures. The State Bank of Pakistan (SBP) earlier this week, kept its benchmark interest rate unchanged at a record high of 22 percent, as it awaited signs of easing inflation pressures after a recent hike in gas prices.

In response to high inflation, the SBP has increased interest rates by a total of 15 percentage points during the last two years.

The central bank expects the headline inflation to decline significantly in the second half of FY24 due to contained aggregate demand, easing supply constraints, moderation in international commodity prices and favorable base effect.

PBS data showed gas prices surged by a staggering 1108.6 percent or Rs1,569.4/MMBtu over the year for consumers using up to 3.3719 MMBtu, now reaching Rs1,711 rupees per MMBtu.

Similarly, cigarette prices increased by 93.2 percent, chili powder by 81.7 percent, wheat flour 81.4 percent, garlic 71.2 percent, broken rice basmati by 64.3 percent, rice IRRI-6/9 by 60.6 percent, gents’ sponge chappal 58 percent, gents’ sandal 53.4 percent, sugar 50.5 percent, gur 50.4 percent, and mash pulse prices increased 45 percent over the same week of 2022.

As per the inflation bulletin, for individuals in the lowest income slab, earning up to Rs17,732 per month, the SPI inflation stood at 35.59 percent, while for those in the group spending more than Rs44,175 per month, it was recorded at 41.47 percent. For the middle quintile (Rs22,889 to Rs29,517), the weekly inflation was at 46.99 percent— the highest among all groups.

Out of 51 items whose prices the SPI monitors, 19 items (37.26 percent) witnessed an increase, 10 items (19.6 percent) recorded a decrease, while prices of 22 items (43.14 percent) remained unchanged.

In a week, notable price hikes were recorded in various commodities, including sugar by 6.02 percent to Rs143/kg, gram pulse 2.57 percent to Rs238/kg, eggs (farm) 2.33 percent to Rs352/dozen, rice IRRI-6/9 1.54 percent to Rs164/kg, moong pulse 1.23 percent to Rs284/kg, georgette 1.16 percent to Rs261/meter, onion 1.05 percent to Rs161/kg, cooked beef 0.76 percent to Rs274/plate, masoor pulse 0.69 percent to Rs335/kg, shirting 0.43 percent to Rs416/meter, long cloth 0.20 percent to Rs565/meter, and LPG price increased 0.16 percent to Rs3226/11.8kg cylinder.

Conversely, prices of potatoes were reduced by 12.2 percent to Rs88/kg, tomatoes 5.2 percent to Rs112/kg, tea Lipton 2.6 percent to Rs573/190gm packet, chicken farm (live) 1.2 percent to Rs344/kg, rice basmati broken 0.52 percent to Rs221/kg, mustard oil 0.36 percent to Rs 504/kg, garlic 0.33 percent to Rs586/kg, and vegetable ghee price of 2.5 Kg reduced 0.31 percent to Rs1,329.