SPI inflation up 12.53pc year-on-year as food prices rise

KARACHI: Sensitive price indicator (SPI) for the week ending September 2 witnessed a jump of 0.67 percent week-on-week and 12.53 percent year-on-year with the prices of chicken and onion witnessing a significant hike.

The high food prices are a particular cause of concern for millions of poor people, who have already been squeezed by the coronavirus pandemic and its impact on an economy that struggling to back on a growth path.

Inflation report released by the Pakistan Bureau of Statistics (PBS) showed the highest negative impact of YoY change on those spending up to Rs17,732. SPI for the lowest expenditure group went up 15.51 percent YoY and 0.76 WoW. It went up to 165.18 points from 163.94 points last week.

Miftah Ismail, former finance minister via Twitter said SPI has been “on or above 16 percent YoY for the last 6 months for the poorest 20 percent”.

SPI for the groups spending Rs17,732-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175 showed an increase of 0.80, 0.76, and 0.74 percent, respectively. The lowest WoW impact was on the highest spending group, which faced an increase of 0.63 percent in SPI.

Data attributed the change to increase in prices of chicken (13.17 percent), onions (6.64 percent), pulse masoor (4.20 percent), eggs (3.21 percent), wheat flour (2.39 percent), prepared tea (1.72 percent), and sugar (1.67 percent).

Chicken prices went up by Rs23.18 WoW and Rs66.6 YoY to record at Rs199.20/kg up from Rs176.02 during the previous week and Rs132.60 in the same week last year.

The joint impact of these changes was 0.78 percent in overall SPI, as a result of which all five expenditure groups experienced increase in WoW and YoY inflation. For the week under review, SPI was recorded at 153.16 points against 152.14 points registered previously.

Decrease was noted in the prices of bananas (5.35 percent), LPG (2.74 percent), tomatoes (1.57 percent), pulse moong (1.43 percent), diesel (1.32 percent), petrol (1.25 percent), potatoes (0.55 percent), and broken basmati rice (0.39 percent).

Ismail Iqbal Securities in its note said the YoY inflation dropped slightly to 12.5 percent from 12.7 percent last week, mainly due to high base effect. “We maintain our projected range of 7-7.5 percent (inflation) for September 2021,” the noted added.

SPI is computed on weekly basis to assess the price movements of essential commodities at shorter interval of time so as to review the price situation in the country. It comprises of 51 essential items and the prices are collected from 50 markets in 17 cities of the country. During the week, prices of 17 items increased, 8 decreased, while prices of 26 items remained unchanged.

The YoY trend depicted 12.53 percent spike on account of increase in prices of LPG (50.57 percent), chicken (50.23 percent), electricity for Q1 (46.55 percent), vegetable ghee 1kg (38.88 percent), mustard oil (36.98 percent), vegetable ghee 2.5kg (36.47 percent), chilli powder (35.71 percent), cooking oil 5 litre (34.98 percent), gents sandal (33.37 percent), eggs (28.63 percent), gents sponge chappal (25.13 percent), and washing soap (21.47 percent).

A major decrease was observed in the prices of potatoes (28.01 percent), tomatoes (27.42 percent), and pulse moong (20.39 percent).

PBS data attributes different weightages to the commodities in the SPI basket.

It showed that the price of 11.67kg LPG cylinder, with 1.437 percent weight in the combined group, declined by Rs54.11 to Rs1,919.27 during the week, although it increased by Rs644.59 compared to the same week last year when the fuel was priced at Rs1,274.68.