Weekly inflation cools slightly on fuel price cuts

KARACHI: Pakistan’s weekly inflation eased very slightly after weeks to stand down 0.07 percent week-on-week during the period ended July 20, as the government slashed the prices of petrol and diesel to ease the burden on consumers.

On year-on-year basis, the sensitive price indicator (SPI) went up 29.16 percent, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.

The decrease in SPI was attributed to a decline in prices of food items, onions (10.29%), chicken (8.57%), bananas (8.34%), wheat flour (0.98%), vegetable ghee 1kg (0.49%), vegetable ghee 2.5kg (0.39%) and cooking oil 5 litre (0.30%), and non-food items, petrol (3.40%) and diesel (2.64%).

On the other hand major increase was observed in the prices of tomatoes (36.06%), chili powder (20.17%), sugar (4.77%), eggs (4.70%), gur (3.66%), shirting (2.64%) and garlic (2.31%).

Arif Habib Limited tweeted that SPI recorded a decline of 0.7 percent WoW after May 25, 2023. During the week ended May 25, 2023, SPI went down 0.42 percent WoW and was up 45.49 percent YoY.

For the week under review, SPI was recorded at 258.45 points against 258.63 points registered last week and 200.10 points recorded during the week ended July 21, 2022.

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 30 (58.82 percent) items increased, 9 (17.65 percent) items decreased and prices of 12 (23.53 percent) items remained stable.

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, sugar and long cloth increased; vegetable ghee and wheat flour price decreased; whereas price of electricity and firewood remained unchanged.

Wheat flour, an essential for every household, recorded a drop in price after five weeks. Last time the price of a 20kg wheat flour bag declined was on June 8, 2023 when it was available for an average Rs2,470.65. Since then, the price of a 20kg bag has hiked by Rs363.93 to stand at Rs2,834.58 that has increased difficulties for a majority of low and middle income households. Compared to last year, a 20kg wheat flour bag price has jumped up by 126.82 percent or Rs1,584.87.

Other commodities have also risen on YoY basis, with the highest increase recorded by cigarettes (110.75%), gas charges for Q1 (108.38%), tea (98.99%), broken basmati rice (79.37%), rice irri-6/9 (74.14%), sugar (66.18%), potatoes (60.32%), gents sponge chappal (58.05%), tomatoes (57.58%), gur (54.21%), powdered salt (53.83%) and bread (46.93%).

PBS recorded a decrease in the prices of onions (35.27%), electricity for Q1 (14.58%), pulse masoor (8.08%), LPG (1.06%) and vegetable ghee 1kg (0.51%).

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 29.90, 30.08, 31.23, 30.87, and 29.89 percent respectively.