Inflation ticks up as food prices continue to rise ahead of Ramadan

• Food prices drive inflation rise, but some essentials see declines.
• Annual SPI up 0.32%, with sharp hikes in key goods.
• Lower-income groups face mixed trends, with some relief noted.

KARACHI: Inflation inched up in the week ending 27 February, driven by increasing food costs, as the Sensitive Price Indicator (SPI) registered a 0.38% rise compared to the previous week, The News reported, citing figures published by the Pakistan Bureau of Statistics (PBS).

The upward trend was largely attributed to a significant rise in the prices of essential food items. Tomatoes experienced the steepest hike at 11.49%, followed by bananas (8.32%), eggs (5.43%), chicken (4.13%), potatoes (2.79%), and onions (2.04%). Meanwhile, beef, sugar, and cigarettes also saw slight price increases of 1.68%, 1.55%, and 0.51% respectively.

In contrast, some essential commodities registered price declines. The price of Lipton tea dropped 6.62%, while bread, mustard oil, garlic and pulses saw moderate declines of 1.67%, 1.08%, 1.0% and 1.12% respectively. Liquefied petroleum gas (LPG) recorded a 0.37% decline, providing slight relief to households facing mounting energy costs.

The year-on-year SPI increase stood at 0.32%, with major price hikes observed in essential consumer goods. The price of ladies’ sandals surged 75.09%, while food staples such as pulse moong, bananas, and powdered milk registered increases of 28.47%, 27.78%, and 25.86%, respectively. The cost of beef, potatoes, and vegetable ghee also climbed significantly.

On the flip side, onions and tomatoes saw massive annual price drops of 50.26% and 48.14%, respectively, while wheat flour became 36.99% cheaper. Other notable declines included chili powder, electricity charges, pulses, and petroleum products. Diesel and petrol prices fell 8.07% and 6.97%, respectively, reflecting global trends in energy markets.

Households in lower-income brackets remain the most vulnerable. The SPI analysis by expenditure group shows that the lowest quintile saw a 0.36% weekly inflation increase, while the highest quintile recorded a 0.33% rise. 

On an annual basis, however, the highest-income group faced a 1.27% increase, while lower-income segments experienced deflation, suggesting that inflationary effects have varied across different income levels.