Rise in food, energy prices push weekly inflation to 29.8%

• Annualised inflation rises to 29.83%  for period ending August 3.
• Out of 51 items, prices of 23 increased, 7 decreased, 21 unchanged.
• Central bank keeps anticipates decline in inflation over few months.

KARACHI: Drastic rises in the prices of energy and food pushed Pakistan's weekly inflation up 1.30% and annualised inflation up 29.83% during the period ending August 3, The News reported Saturday, citing official data.

According to the Pakistan Bureau of Statistics (PBS), the increase in the sensitive price indicator (SPI) was attributed to an increase in the prices of tomatoes (16.85%), LPG (9.82%), petrol (7.86%) and diesel (7.82%), chili 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, a 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 ending August 8, 2022. 

PBS compiles SPI by 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%) items increased, 7 (13.72%) items decreased and prices of 21 (41.18%) items remained unchanged.

Different weights are assigned to various commodities in the SPI basket. Commodities with the highest weights for the lowest quintile include milk (17.5449%), electricity (8.3627%), wheat flour (6.1372%), sugar (5.1148%), firewood (5.0183%), long cloth (4.2221%), and vegetable ghee (3.2833%).

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 to 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, 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% respectively.

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

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

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 installment 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's decision to hold the interest rate at 22% 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.