Short-term inflation in Pakistan hits record 45.64%

Islamabad: Short-term inflation in Pakistan based on the Sensitive Price Index (SPI), saw a record increase to 45.64 per cent for the combined income group on a year-on-year basis for the week ending March 16, Pakistan-based Dawn newspaper reported.

This was fuelled by a consistent increase in the price of essential commodities, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday. Short-term inflation on a week-on-week basis, however, increased by 0.96 per cent as tomatoes, potatoes, cooking oil and fruits became costlier.

The SPI is expected to intensify further as the full impact of depreciation, increase in petroleum products, hike in general sales tax and higher energy costs is yet to reflect in official data. The commodity prices would show a rapid increase with a spike in demand, according to Dawn.

Earlier, the year-on-year SPI surged to 45.5 pc during the week ended on Sept 1, 2022. It stayed above 40pc for the first time since Aug 18 last year when the reading was 42.31pc.

Of the 51 items in the SPI basket, prices of 28 items soared while those of 11 items decreased, however, rates of 12 items remained unchanged.

During the week under review, the items whose prices increased the most over the same week a year ago were onions (233.89pc), cigarettes (165.86pc), gas charges for Q1 (108.38pc), diesel (102.84pc), tea Lipton (81.29pc), petrol (81.17pc), rice irri 6/9 (78.75pc), rice basmati broken (78.10pc), bananas (77.84pc), eggs (72.19pc), pulse moong (69.44pc), wheat flour (56.27pc) and bread (55.36pc).

On a week-on-week basis, the biggest change was observed in the prices of tomatoes (18.06pc), tea Lipton (9.26pc), potatoes (4.52pc), bananas (4pc), sugar (2.70pc), wheat flour (2.40pc), cooking oil 5 litre (1.20pc), vegetable ghee 2.5 Kg (1.16pc), lawn (5.77pc), diesel (4.65pc), shirting (2.80pc) and Petrol (1.84pc), Dawn reported.

Products whose prices saw the highest decline over the previous week were onions (15.91pc), chicken (5.97pc), garlic (5.73pc), pulse masoor (2.27pc), eggs (2.26pc), LPG (1.90pc), vegetable ghee 1 Kg (1.39pc), pulse gram (1.24pc), pulse mash (1.08 pc), pulse moong (0.84pc) and mustard oil (0.64pc).

Strict measures are being taken by the Pakistan government including hikes in fuel and power tariffs, withdrawal of subsidies, market-based exchange rate and higher taxation, to generate revenue for bridging the fiscal deficit, which may result in slow economic growth and higher inflation in the coming months.

The increase in the policy rate to 20 pc, general sales tax rate from 17pc to 18pc on most items, and to 25pc on more than 800 imported food and non-food items will further increase retail prices of consumer goods.