No respite for masses, weekly inflation hits all-time high of 48.35% YoY

• Analyst says SPI went up mainly because of an increase in prices of chicken, wheat flour.
• Price of milk, wheat flour, and sugar increased; vegetable ghee decreased.
• Whereas prices of electricity, firewood, and long cloth remained unchanged. 

KARACHI: No relief for the masses as the weekly inflation hit an all-time high of 48.35% year-on-year (YoY) with prices of chicken and wheat flour increasing during the seven-day period ending May 4, The News reported citing official data.

The sensitive price indicator (SPI) went up 1.05% week-on-week, which the Pakistan Bureau of Statistics (PBS) attributed the increase in food prices to chicken (8.91%), potatoes (3.99%), powdered milk (3.81%), pulse gram (1.96%), pulse masoor (1.83%), eggs (1.81%), mutton (1.71%), pulse mash (1.58%), cooked daal (1.36%), and bread (1.13%), and non-food items, gents sponge chappal (58.05%), gents sandal (33.36%), ladies sandal (14.31%) and washing soap (1.27%).

On the other hand, a significant decrease was noted in the prices of onions (16.69%), garlic (3.44%), tomatoes (3.41%), diesel (1.70%), mustard oil (0.99%), LPG (0.96%), cooking oil 5 litres (0.40%) and vegetable ghee 2.5kg and 1kg (0.10%) each.

Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, on his Twitter account, said, “SPI inflation broke an all-time high (YoY).”

For the week under review, SPI was recorded at 254.94 points against 252.20 points registered last week and 171.78 points recorded during the week ending May 5, 2022.

Fahad Rauf, head of research at Ismail Iqbal Securities, said that SPI went up mainly because of an increase in the prices of chicken and wheat flour.

According to news reports, wheat flour prices have mainly increased due to shortages being faced by flour mills on account of low supply by the government. On the other hand, chicken prices have increased because of higher day-old chick prices.

“We expect May 2023 CPI (consumer price index) to come around 38% YoY vs 36.4% YoY in April 2023,” Rauf noted.

PBS compiles SPI by collecting prices of 51 essential items from 50 markets in 17 cities of the country. During the week, prices of 30 items (58.82%) increased, 9 items (17.65%) decreased and prices of 12 items (23.53%) remained unchanged.

Different weights are assigned to various commodities in the SPI basket. Commodities with the highest weights for the lowest quintile include milk (17.54%), electricity (8.36%), wheat flour (6.14%), sugar (5.12%), firewood (5.02%), long cloth (4.22%), and vegetable ghee (3.28%).

Of these commodities, the price of milk, wheat flour, and sugar increased; vegetable ghee decreased; whereas prices of electricity, firewood, and long cloth remained unchanged. However, the prices of all these commodities went up on a YoY basis.

Wheat flour prices have been increasing since last week. The average price of a 20kg wheat flour bag stood at Rs2,683.22 during the week under review, up Rs24.61 or 0.93% WoW and Rs1,716.66 or 177.61% YoY per bag. Last year, during the same week, the price of wheat flour was only Rs966.56/20kg bag.

PBS data showed that among the 17 cities part of the data, the residents of Islamabad paid the highest average price for wheat flour at Rs3,126.4/20kg bag, up by Rs115.59 from last week’s price of Rs3,010.81/20kg bag. It was followed by Rawalpindi, where the average price was Rs3,119.96 up by Rs103.08 from last week’s Rs3,016.88/20kg bag.

The city-wise breakdown from highest to lowest showed that the average price of a 20kg wheat flour bag in Peshawar was Rs3,066.30; in Quetta, it was Rs2,939.99; in Bannu Rs2,916.00; Khuzdar Rs2,800.00; Karachi Rs2,799.04; Hyderabad Rs2,786.64; Lahore Rs2619.47; Gujranwala and Sargodha Rs2,533.00; Larkana Rs2,500.00; Sialkot Rs2,467.00; Multan Rs2,461.61; Sukkur Rs2,440.00; Bahawalpur Rs2,400.00; and Faisalabad Rs2,315.

PBS data attributed the YoY rise in SPI to the jump in the prices of wheat flour (177.61%), cigarettes (146.44%), potatoes (123.00%), gas charges for Q1 (108.38%), tea (104.28%), gents sponge chappal (100.33%), diesel (99.39%), eggs (95.45%), broken basmati rice (89.31%), bananas (87.86%), petrol (87.81%), rice irri-6/9 (84.43%), pulse moong (68.44%), bread (62.83%) and pulse mash (60.59%). 

A decrease was observed in the prices of tomatoes (50.09%), onions (10.03%), and chilli powder (6.48%).

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 44.47%, 47.90%, 47.90%, 48.15%, and 49.75% respectively.