No respite for masses as weekly inflation stays above 48% for 2nd consecutive week

• SPI shots past 48% YoY due to rising wheat flour prices.
  
• Wheat flour prices increasing due to shortage being faced by flour mills.
• Short-term inflation has been on the rise since Ramazan.

KARACHI: The back breaking inflation seems to not end as the weekly inflation increased by 0.27% week-on-week and 48.02% year-on-year, official data showed on Friday, as the price of wheat flour surged to Rs2,757.32 per 20kg bag during the week ending May 11, reported The News.

The short-term inflation rose by an all-time high of 48.35% for the period that ended on May 4.

The Pakistan Bureau of Statistics (PBS) attributed the rise in sensitive price indicator (SPI) to the increase in prices tomatoes (6.32%), gur (3.41%), wheat flour (2.76%), prepared tea (2.66%), potatoes (2.14%), cooked beef (2.12%), cooked daal (1.98%), powdered milk (1.91%), eggs (1.83%), broken basmati rice (1.42%), pulse masoor (1.19%), beef (1.18%), and washing soap (1.04%).

A decrease was observed in the prices of onions (9.40%), chicken (2.25%), LPG (1.51%), garlic (1.39%), bananas (0.68%), pulse gram (0.13%), and mustard oil (0.05%).

Fahad Rauf, head of research at Ismail Iqbal Securities, blamed the increase in prices of chicken and wheat flour for the rise in SPI.

As highlighted in the previous week, wheat flour prices are increasing because of a shortage being faced by flour mills on account of lower government supply. News reports suggest that 144 flour mills in Rawalpindi and Islamabad have shutdown, and the shortage is expected to continue for at least another week.

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

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 (45.09%) items increased, 7 (13.73%) items decreased and prices of 21 (41.18%) items remained unchanged.

Wheat flour, which holds 6.1372% weightage in the SPI basket increased by Rs74.1 or 2.76% WoW and by Rs1,386.91 or 101.20% YoY to stand at Rs2,757.32/20kg bag.

Wheat flour prices have been increasing for three weeks now.

PBS data showed that among the 17 cities, the residents of Rawalpindi paid the highest average price for wheat flour at Rs3,319.94/20kg bag, up by Rs199.98 from last week’s price of Rs3,119.96/20kg bag.

It was followed by Islamabad, where the average price was Rs3,286.22 up by Rs159.82 from last week’s Rs3,126.4/20kg bag.

A city-wise breakdown from highest to lowest showed that the average price of a 20kg wheat flour bag in Peshawar was Rs3,266.32 up from Rs3,066.30; in Bannu, it was Rs3,016.03 up from Rs2,916.00; in Quetta, it was Rs2,969.99 up from Rs2,939.99; in Karachi, it was Rs2,850.56 down from Rs2,799.04; in Khuzdar, it was stable at Rs2,800.00; Hyderabad was stable at Rs2,786.64; Lahore was Rs2,725.23 up from Rs2619.47; Gujranwala Rs2,600 up from Rs2,533; Sialkot Rs2,660 up from Rs2,467; Sargodha stable at Rs2,533; Larkana stable at Rs2,500; Sukkur at Rs2,500 up from Rs2,440; Multan at Rs2,470.54 up from Rs2,461.61; Bahawalpur Rs2,466 up from Rs2,400.00; and Faisalabad at Rs2,440 up from Rs2,315.

A decrease in the price of wheat was recorded only in Karachi by the PBS.

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 43.67%, 47.61%, 46.96%, 46.99%, and 49.43% respectively.