KARACHI: High food prices pushed weekly inflation up 0.48 percent week-on-week and 30.16 percent year-on-year during the seven-day period ended November 24, official data showed on Friday.
According to the Pakistan Bureau of Statistics (PBS) data, the sensitive price indicator (SPI) increased for the sixth consecutive week mainly on account of increase in prices of eggs (8.45 percent), bananas (5.87 percent), chicken (4.03 percent), onions (2.35 percent), tea prepared (2.02 percent), sugar (1.31 percent), firewood (1.76 percent), and cooked daal (1.07 percent).
On the other hand, major decrease was observed in the prices of pulse gram (1.26 percent), tomatoes (1.08 percent), pulse masoor (1.07 percent), vegetable ghee 2.5kg (0.59 percent), wheat flour (0.40 percent), LPG (0.39 percent), cooking oil 5 litre (0.32 percent) and pulse moong and mash (0.17 percent) each.
The State Bank of Pakistan (SBP) increased the interest rate by 100bps to 16 percent to tackle inflationary pressures that have proven to be stronger and more persistent than it expected.
Topline Securities CEO Mohammed Sohail said, “Looks like SBP more concerned with rising inflation. Moreover IMF (International Monetary Fund) talks for next tranche is under way and is delayed that may have also compelled the committee to take this step to fight inflation.”
PBS data showed that for the groups spending up to Rs17,732; Rs17,733-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175; WoW SPI went up 0.46 percent, 0.48 percent, 0.47 percent, 0.50 percent, and 0.47 percent respectively. On YoY basis, it increased 28.51 percent, 29.56 percent, 30.60 percent, 31.34 percent, and 30.32 percent respectively.
Fahad Rauf, head of research at Ismail Iqbal Securities, attributed the increase in WoW inflation to mainly eggs and chicken.
“We expect November CPI (consumer price index) to come at 24.2 percent vs 26.6 percent in October 2022 mainly due to high base effect,” he said in his note. The month-on-month inflation was expected at 1 percent, driven by food inflation, while energy inflation would remain muted as electricity price adjustments have already been made, while the decision on increasing gas prices was still pending.
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 19 (37.25 percent) items increased, 9 (17.65 percent) items decreased and prices of 23 (45.10 percent) items remained stable.
On YoY basis, a significant increase has been recorded in the prices of onions (363.67 percent), tomatoes (64.74 percent), diesel (64.57 percent), tea (60.64 percent), pulse gram (54.71 percent), petrol (53.85 percent), salt powdered (53.26 percent), bananas (52.70 percent), gents sponge chappal (52.21 percent), pulse moong (50.45 percent), eggs (48.24 percent) and pulse mash (46.66 percent).
Different weightages are assigned to various commodities in the SPI basket. Commodities with the highest weights for the lowest quintile include milk (17.5449 percent), electricity (8.3627 percent), wheat flour (6.1372 percent), sugar (5.1148 percent), firewood (5.0183 percent), long cloth (4.2221 percent), and vegetable ghee (3.2833 percent).
Of these commodities, prices of milk, sugar, firewood, and long cloth increased; wheat flour and vegetable ghee 2.5kg decreased; whereas prices of electricity and vegetable ghee 1kg remained the same.
Compared to the last few years, prices of commodities have jumped up significantly, putting massive burden on the masses, particularly in the midst of stagnant wages.
Although, the price of wheat flour did not increase during the week under review, compared to last year, the price of a 20kg wheat flour bag is up 27.12 percent or Rs322.11 to Rs1,509.83/20kg. Last year, a 20kg wheat flour bag was available for Rs1,187.72, whereas five years ago (week-ended November 23, 2017), the price was Rs775.48/20kg bag.
Same is the case with the staple rice. Price of 1kg broken basmati went up 29.53 percent or by Rs29.21 to stand at Rs128.11/kg from Rs98.90 last year; while IRRI-6/9 (Sindh/Punjab) prices jumped up 34.54 percent or Rs25.39/kg to stand at Rs98.90 from Rs73.51/kg last year.