Weekly inflation up 46.82pc YoY, 0.15pc WoW

KARACHI: Weekly inflation rose by 46.82 percent year-on-year and 0.15 percent week-on-week during the seven-day period ending on April 27, exacerbating the financial strain on lower and middle income groups, official data showed on Friday.

Pakistan Bureau of Statistics (PBS) in its data attributed the increase in the sensitive price indicator (SPI) to the rise in prices of potatoes (8.22 percent), chicken (1.75 percent), wheat flour (1.55 percent), gur (1.23 percent), bread (1.13 percent), and rice irri-6/9 (1.01 percent).

On the other hand major decrease was observed in the prices of tomatoes (19.20 percent), bananas (5.39 percent), onions (1.40 percent), sugar (1.19 percent), LPG (1.09 percent), pulse masoor (0.98 percent), and mustard oil (0.39 percent).

For the week under review, SPI was recorded at 252.20 points against 251.83 points registered last week and 171.78 points recorded during the week ended April 28, 2022.

Fahad Rauf, head of research at Ismail Iqbal Securities said that SPI went up moderately mainly because of an increase in the prices of potatoes and mutton.

The price trend of perishable food items during the Eid week has been mixed, with prices of potatoes, chicken, and mutton going up and prices of tomatoes, bananas, and onions going down.

“We expect April 2023 CPI (consumer price index) to come around 38 percent vs 35.4 percent in March 2023, where the month-on-month increase is mainly expected from house rent revision and higher wheat prices,” Rauf added.

In a forecast, Ismail Iqbal Securities said, “Considering persistent inflationary pressures, and absence of IMF programme, another rate hike cannot be ruled out. SBP might look to hold another earlier than scheduled MPC (Monetary Policy Committee) meeting.”

Another hike in interest rates would further discourage businesses, which have already put their expansion plans on the backburner and capped hiring. Import restrictions have also increased the woes for industries and businesses that have been facing frequent shutdowns; which means uncertain or no wages for millions of workers.

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 (41.17 percent) items increased, 7 (13.73 percent) items decreased and prices of 23 (45.10 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 wheat flour increased; sugar decreased; whereas prices of electricity, firewood, long cloth and vegetable ghee remained unchanged. However, the prices of all these commodities went up on YoY basis.

The PBS data attributed the YoY rise in SPI to the jump in the prices of wheat flour (175.06 percent), cigarettes (146.44 percent), potatoes (114.45 percent), gas charges for Q1 (108.38 percent), tea (104.28 percent), diesel (102.84 percent), eggs (91.98 percent), petrol (87.81 percent), ), broken basmati rice (87.71 percent), bananas (86.33 percent), rice irri-6/9 (83.39 percent), pulse moong (67.60 percent), plain bread (61.02 percent), pulse mash (58.10 percent), and washing soap (49.93 percent).

Decrease was observed in the prices of tomatoes (48.33 percent) and chili powder (6.48 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 43.13, 46.39, 46.36, 46.55, and 48.23 percent respectively.