Friday June 21, 2024

SPI inflation cools for fifth week as food prices drop

By Israr Khan
May 18, 2024
A person counts Rs100 notes in this undated image. — AFP/File
A person counts Rs100 notes in this undated image. — AFP/File

ISLAMABAD: The weekly inflation rate dropped 1.05 percent in the week ending May 16, marking the fifth consecutive week of decline due to soft food prices, data from the Pakistan Bureau of Statistics (PBS) showed on Friday.

For the past four weeks, the short-term inflation, as measured by the Sensitive Price Index (SPI), has declined by more than one percent each week, signaling that the general headline CPI inflation shall also come down significantly.

Notably, during the week that ended April 18, the SPI fell by 0.79 percent, April 25 (1.1pc), May 2 (1.0pc), May 9 (1.39pc), and now during the week under review, it fell further by 1.06 percent over the previous week.

Whereas on year-on-year, the SPI that gauges the prices of 51 essential items, increased by 21.22 percent—the lowest reading of the last 101 weeks. In the previous week, it was 22.3 percent.

During these 101 weeks of SPI readings, the highest was recorded at 48.35 percent in the week ending on May 4, 2023.It is to be noted that CPI inflation in April 2024 was recorded at 17.3 percent year-on-year (YoY), down from March's reading of 20.68 percent. It surged to a record 38 percent in May 2023, the highest since July 1965, largely fueled by runaway food prices.

The weekly percentage change by income groups showed that SPI decreased across all quantiles ranging from -1.02 percent and -1.17 percent. The lowest income group experienced a weekly fall of 1.17 percent, while the highest income group experienced a fall of 1.06 percent.

On a yearly basis, SPI increased across all quantiles ranging between 14.54 percent and 24.58 percent. Yearly SPI for the lowest income Group increased by 14.54 percent while the highest income group recorded an increase of 19.07 percent.

Out of 51 items, the SPI is tracking, 20 items' prices increased, 16 decreased, and the other 15 were stable.As per the indicator, notable reductions were observed in the prices of tomatoes over the previous week which dropped by 31.2 percent to Rs59/kg, onions by 21.8 percent to Rs99/kg, garlic by 7.76 percent to Rs552/kg, petrol by 5.3 percent to 274.17/liter, wheat flour by 3.7 percent to Rs1,907/20kg, LPG also cheaper by 3.7 percent to Rs2,883/11.67kg cylinder, diesel by 2.79 percent to Rs275.1/liter. Likewise, rice basmati broken price also fell by 1.5 percent to Rs217/kg, chilies powder by 1.3 percent to Rs365/kg, masoor pulse by 1.1 percent to Rs321/kg, and bananas price reduced by 0.87 percent to Rs145/dozen.

Whereas, weekly, some items experienced price hikes, these include cooked daal increased by 1.96 percent, shirtingby 1.74 percent, potatoes by 1.46 percent, beef by 1.1 percent, mutton by 1.04 percent, and pulse gram by 1 percent.

On a year-on-year basis, gas prices hiked by 570 percent for the lowest consumer slab, followed by an 88 percent spike in onion prices. Similarly, Chilies' power was expensive by 70 percent, garlic by 62 percent, and tomato by 36 percent. Powder salt was expensive by 33 percent, shirting by 32 percent, and energy-saving bulbs by 28 percent. Likewise, gents' sandals were costlier by 25 percent, beef by 24 percent, mash pulse by 23 percent and sugar was costlier by 21 percent over the prices of the same week of the last year.

Conversely, on a year-on-year, bananas were cheaper by 39 percent, wheat flour by 30 percent, chicken by 26 percent, cooking oil 5 Litre by 20 percent, vegetable ghee by 16 percent, mustard oil by 11 percent and eggs were cheaper by 9 percent.