KARACHI: Weekly inflation increased 0.21 percent week-on-week and 39.26 percent year-on-year during the seven-day period ended June 8, showing that the annualised number eased below 40 percent after 15 weeks.The Pakistan Bureau of Statistics (PBS) attributed the current increase in the SPI to increase in food prices, including tomatoes (29.15 percent), onions (20.85 percent), chicken (7.01 percent), potatoes (1.74 percent), prepared tea (1.38 percent), rice irri-6/9 (1.26 percent), garlic (1.02 percent) and non-food item, georgette (1.29 percent).On the other hand major decrease was observed in the prices of of bananas (7.62 percent), LPG (6.60 percent), eggs (3.41 percent), pulse masoor (2.25 percent), pulse moong (2.22 percent), mustard oil (2.16 percent), wheat flour (2.02 percent), cooking oil 5 litre (0.81 percent), pulse gram (0.65 percent) and vegetable ghee 1kg (0.33 percent).
Analysts pointed out that the sensitive price indicator (SPI) had eased below 40 percent YoY after 15 consecutive weeks as per the PBS data. During the week ended February 16, 2023, SPI was up 38.42 percent YoY. In the weeks following that, the indicator remained at above 40 percent, with the highest inflation recorded at 48.35 percent during the seven-day period ended May 4, 2023. For the week under review, SPI was recorded at 254.67 points against 254.13 points registered last week and 182.88 points recorded during the week ended June 9, 2022. Fahad Rauf, head of research at Ismail Iqbal Securities said that SPI went up mainly because of an increase in the prices of chicken and onions. According to media reports, chicken prices are increasing mainly due to lower supply from farms on account of concerns regarding potential tax increases in the upcoming budget.
“We expect June 2023 CPI (consumer price index) to come around 30 percent YoY vs 38 percent in May 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 21 (41.18 percent) items increased, 10 (19.61 percent) items decreased and prices of 20 (39.21 percent) items remained unchanged. 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, the price of milk and sugar went up; wheat flour and vegetable ghee 1kg decreased; whereas prices of electricity, firewood, and long cloth remained unchanged. However, the prices of all these commodities went up on YoY basis. The YoY trend depicts increase of 39.26 percent, on account of rising prices of cigarettes (138.45 percent), tea (114.93 percent), gas charges for Q1 (108.38 percent), wheat flour (101.85 percent), gents sponge chappal (100.33 percent), rice irri-6/9 (79.59 percent), broken basmati rice (79.05 percent), potatoes (77.65 percent), bananas (74.68 percent), chicken (65.53 percent), bread (59.01 percent), pulse moong (56.84 percent), gents sandal (53.89 percent) and pulse mash (53.02 percent).
The PBS data observed a decline in the prices of tomatoes (29.60 percent) and onions (15.85 percent). 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 38.24, 41.06, 40.20, 39.27, and 39.32 percent respectively.