KARACHI: Sensitive price indicator (SPI) inflation jumped back up 0.94 percent week-on-week and 30.62 percent year-on-year during the seven-day period ended September 29, following surge in onion and tomato prices.
Pakistan Bureau of Statistics (PBS) data issued on Friday attributed the WoW spike to the surge in prices of onions (47.77 percent), tomatoes (30.29 percent), tea (2.50 percent), bread (1.74 percent), and washing soap (1.13 percent).
During the previous week ended September 22, SPI declined 8.11 percent WoW and was up 29.28 percent YoY.
Fahad Rauf, head of research at Ismail Iqbal Securities, in his note said the rise in SPI was mainly due to an increase in the prices of onions and tomatoes. “This is likely due to supply disruption from Afghanistan due to recent tensions at the border,” he said.
To recall, he reminded that prices of perishables had shot up post-floods, and then came down following imports from Afghanistan and Iran. If the border situation prolongs, this could again become a problem from inflation perspective.
“We estimate September 2022 CPI (consumer price index) at 0.1 percent MoM (24.7 percent YoY), where higher food inflation would largely be offset by electricity FCA relief,” he added.
Government’s decision to spread FCA recovery over six instalments brought inflation down numerically, with per unit rate of electricity declining to Rs3.47 compared to Rs6.38 last year. However, food inflation continues to wreak havoc on Pakistanis.
Average price of 1kg tomatoes was Rs176.82 as per PBS data, up 30.29 percent WoW and 224.2 percent YoY, whereas the city-wise breakdown showed the price went as high as Rs250/kg in Karachi. In some localities of Karachi, tomatoes were sold at Rs80/250 grams.
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 20 (39.22 percent) items increased, 10 (19.61 percent) items decreased and prices of 21 (41.17 percent) items remained unchanged.
According to PBS data, out of the 51 items surveyed, prices of only gur, sugar, electricity and red chilli powder declined YoY. The rest of the commodities have registered a spike in prices compared to the same week last year.
PBS attributed the YoY increase in SPI to the increase in prices of tomatoes (224.20 percent), onions (139.03 percent), diesel (105.12 percent), petrol (91.87 percent), pulse gram (74.56 percent), pulse masoor (72.42 percent), mustard oil (64.53 percent), washing soap (63.33 percent), cooking oil 5 litre (61.78 percent), vegetable ghee 2.5kg (58.37 percent), pulse mash (57.36 percent), vegetable ghee 1kg (55.89 percent), gents sponge chappal (52.21 percent) and pulse moong (47.96 percent).
Wheat flour price that had been on an upward trajectory for seven consecutive weeks, declined 2.99 percent to stand at Rs1,572.77/20kg bag compared to last week’s average of Rs1,621.32 recorded by PBS. During the same week last year, a 20kg flour bag was priced at Rs1,186.15, which shows that the price of the essential commodity has risen by a massive 32.59 percent.
Decline in prices of wheat flour, cooking oil, vegetable ghee, garlic, LPG cylinder, pulse masoor, bananas, potatoes, and sugar might bring some relief to the masses; however, analysts expect prices of perishables would start posting an increase again.