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Monday June 17, 2024

Weekly inflation slips to nearly two-year low

By Israr Khan
May 04, 2024
Vendors are selling vegetables at a market in Lahore on March 26, 2023. — Online
Vendors are selling vegetables at a market in Lahore on March 26, 2023. — Online

ISLAMABAD: The Sensitive Price Indicator (SPI) based inflation rate fell to a nearly two-year low in the week ending May 2, official data showed on Friday, as prices of food and fuel declined.

The SPI fell to 24.39 percent year-over-year, down 1 percent from the previous week, according to data released by the Pakistan Bureau of Statistics (PBS). This marks the third consecutive weekly decline.

Since June 2022, this is the lowest weekly reading. During this period, the highest reading was seen at 48.35 percent in the week ending on May 4, 2023.During the week under review, notable reductions were observed in the prices of tomatoes, onions, chicken, wheat flour, LPG, and pulses.

Out of the SPI basket of 51 items that are being monitored across 50 markets in 17 cities countrywide, the prices of 15 items increased, 18 decreased and the other 18 remained stable over the previous week.

The SPI has continued its downward trend, falling by 1.1 percent last week and 0.79 percent the week before that.According to the latest data released by the Pakistan Bureau of Statistics (PBS) on Friday, significant decreases were recorded in prices compared to the previous week. These include a drop of 22 percent in tomato prices to Rs72/kg, chicken by 8 percent to Rs420/kg, onions by 7.7 percent to Rs157/kg, wheat flour by 6.9 percent to Rs2,062/20kg bag, bananas by 5.3 percent to Rs150/dozen.

Likewise, diesel price also fell by 2.9 percent to Rs283/liter, chilies powder by 2.6 percent to Rs370/200gm packet, LPG by 2.4 percent to Rs3,106/11.67kg cylinder, petrol by 1.8 percent to Rs289.6/liter, masoor pulse by 1.25 percent to Rs325/kg and moong pulse price reduced by 0.9 percent to Rs310/kg.

Conversely, certain items experienced price increases, with potatoes up by 6.1 percent to Rs84/kg, powder salt by 0.9 percent to Rs70/800gm, garlic by 0.85 percent to Rs607/kg, and powder milk by 0.7 percent to Rs848/kg. Similarly, mutton, eggs, cigarettes, curd, and beef prices also increased by less than a percent each.

For the lowest income group earning less than Rs17,732 per month, there was a weekly decrease of 1.09 percent, while the highest income group earning over Rs44,175 per month saw a fall of 0.95 percent. Yearly, the SPI for the lowest income group increased by 17.55 percent, while the highest income group recorded a rise of 22.09 percent.

The PBS further reported that during the week, year-on-year, gas prices hiked by 570 percent for the lowest consumer slab, followed by a 145 percent spike in onion prices. Similarly, tomato prices increased by 79 percent, and garlic and chili powder by 72 percent each. Powder salt was expensive by 33 percent, energy-saving bulbs and shirting by 30 percent each. Likewise, gents' sandal and mash pulse were costlier by 25 percent each, and gur and beef by 24 percent each.

Whereas, on year-on-year, bananas were cheaper by 38 percent, wheat flour by 23 percent, cooking oil 5 Litre by 20 percent, vegetable ghee by 17 percent, mustard oil by 13 percent, eggs 10 percent, LPG 8.5 percent, chicken 4 percent, and diesel by 2 percent.

It is to be noted that in April 2024, Pakistan's Consumer Price Index (CPI) fell for the fourth straight month to 17.3 percent year-on-year, down from March's 20.68 percent, per the Pakistan Bureau of Statistics (PBS).

Core inflation dropped to 13.1 percent from 19.5 percent in April 2023. Despite this decline, the State Bank’s Monetary Policy Committee (MPC) maintained the benchmark policy rate at a record high of 22 percent on April 29 for the seventh consecutive committee meeting.In March 2024, for the first time in 37 months, Pakistan's real interest rate (current interest rate minus inflation) turned positive. In April, it remained positive at 4.7 percent.