Food, gas prices keep weekly inflation six-month high at 43.16%

• Main drivers of inflation were food prices including sugar.
• This was highest level since week ending on June 1.
• It is fifth consecutive week that SPI inflation stayed above 40%.

ISLAMABAD: Weekly inflation rate remained at a six-month high of 43.16% 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% 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%.

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

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%, 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% 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%, chilli powder by 81.7%, wheat flour 81.4%, garlic 71.2%, broken rice basmati by 64.3%, rice IRRI-6/9 by 60.6%, gents’ sponge chappal 58%, gents’ sandal 53.4%, sugar 50.5%, gur 50.4%, and mash pulse prices increased 45% 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%, while for those in the group spending more than Rs44,175 per month, it was recorded at 41.47%. For the middle quintile (Rs22,889 to Rs29,517), the weekly inflation was at 46.99% — the highest among all groups.

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

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

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

Originally published in The News