Weekly SPI inflation dips slightly, annual rate remains high

KARACHI: Pakistan’s short-term inflation inched lower by 0.02 percent with annualised inflation still high at 37.33 percent during the seven-day period ended September 27, official data showed.

The Pakistan Bureau of Statistics (PBS) data published on Thursday attributed the decline in the sensitive price indicator (SPI) inflation to the drop in prices of tomatoes (7.09%), chicken (3.79%), bananas (3.07%), sugar (1.56%), pulse gram (0.80%), gur (0.78%), wheat flour (0.68%), cooking oil 5 liter (0.46%), LPG (0.42 percent), and mustard oil (0.33%).

On the other hand, major increase was observed in the prices of onions (21.42%), garlic (4.44%), potatoes (0.99%), matchbox (0.87%), cooked beef (0.83%), curd (0.35%), eggs (0.26%) and pulse moong (0.25%).

For the week under review, SPI was recorded at 281.70 points against 281.77 points registered last week and 205.13 points recorded during the week ended September 29, 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 14 (27.45 percent) items increased, 14 (27.45 percent) items decreased and 23 (45.10 percent) items remained stable.

SPI eased slightly as a majority of the commodities with the highest share in the short-term inflation basket either declined or remained unchanged, including the prices of wheat flour, sugar, and 1kg vegetable ghee that decreased, and electricity, firewood, long cloth, and vegetable ghee 2.5kg, which remained the same. Only the price of milk increased during the week under review.

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).

Though the numbers have declined, in real terms, life is becoming unaffordable for those with the lowest spending capacities and informal jobs.

Nasreen, a domestic help, who works with her daughter in four different houses, said that prices of essential commodities have become unbearable for her. “Despite working in four different houses, I am unable to run my household till the end of the month. Each month we end up taking a loan,” she shared while explaining that her household includes a married son, three unmarried daughters, and a minor who goes to a madrasah.

“My husband leased a rickshaw from a dealer, but with the rise in petrol prices, it is becoming impossible for him to find passengers to even pay the rickshaw instalments. So now my husband accompanies my son to work at a construction site,” Nasreen said, while lamenting that none of this work was sustainable.

With energy prices expected to rise even further to meet IMF conditions as well as the recent rise in international rates, short-term inflation would likely go up in the near-term.

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 36.19, 39.00, 38.21, 37.14, and 33.28 percent respectively.

PBS data shows that the highest increase in SPI was once again faced by those spending up to Rs22,888, while the lowest impact was witnessed by those spending more than Rs44,175.

A retired banker, who wished to remain anonymous said that he has now been brought down to selling his certificates with the National Savings. “I was barely making ends meet even three years ago on the profit I earned from my pension certificates, and the absurdly meagre EOBI, but now, with the excruciatingly high K-Electric bill that is at times as much as my house rent, I am selling my certificates one by one,” he explained.