SPI eases for third time in a row to 0.11pc

KARACHI: Weekly inflation eased down slightly for the third consecutive week to 0.11 percent on account of drop in prices of perishables and LPG, with year-on-year numbers up at 18.62 percent during the seven-day period ended January 27, 2022.

Data released by the Pakistan Bureau of Statistics (PBS) on Friday showed a decrease in prices of food items, chilli powder (9.05 percent), potatoes (4.03 percent), onions (2.86 percent), eggs (2.19 percent), chicken (1.71 percent), sugar (1.14 percent), bananas (0.61 percent), and non-food item LPG (2.04 percent). The decreases had a joint impact of (-0.47 percent) in overall sensitive price indicator (SPI) for the combined group.

Arif Habib Limited said SPI went down by 0.11 percent, showing the third consecutive weekly decline.

Different weightages have been assigned to the commodities in the SPI basket. Heavyweights for the lowest quintile include milk (17.5449 points), electricity (8.3627 points), wheat flour (6.1372 points), sugar (5.1148 points), firewood (5.0183 points), long cloth (4.2221 points), and vegetable ghee (3.2833 points).

Of these commodities, firewood, wheat flour, and vegetable ghee prices increased during the week under review; sugar price declined, whereas prices of milk, electricity and long cloth did not change. However, prices of all these commodities have increased when compared with last year.

A bag of 20kg wheat flour is now available at an average Rs1,166.48 in the market. The essential food item has increase Rs2.51 WoW and Rs219.98 YoY. Compared to four years ago, the price of a wheat bag has jumped by Rs391.36. During the week ended January 25, 2018, the price of a 10kg bag was Rs387.56.

Similarly, a 2.5kg tin of vegetable ghee is available for Rs1,017.01, whereas during the same week in January 2018, it was being sold for Rs462.53/2.5kg by the retailers. This shows a jump of Rs554.48 on a tin of vegetable ghee in four years, including three years of this regime.

Analyst Fahad Rauf of Ismail Iqbal Securities in his note said SPI witnessed a slight decline of 0.11 percent week-on-week, led by fall in prices of chilli powder, potatoes, onions, eggs and LPG, but the 31 percent increase in prices of tomatoes limited the decline.

“We expect CPI to clock in at 12.7 percent during January 2022 vs 12.3 percent in December 2021,” the note added.

SPI for the groups spending up to Rs17,731; Rs17,732-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175 showed a decrease of 0.07, 0.05, 0.07, 0.09, and 0.12, respectively. On YoY basis, all expenditure groups suffered from price hikes, with the highest impact of 20.24 percent change faced by those having the lowest spending capacity of up to Rs17,732. For the week under review, SPI was recorded at 167.11 points against 167.29 points registered previously.

SPI is computed on weekly basis to assess the price movements of essential commodities at shorter interval of time 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 an increase of 19.82 percent, with electricity for Q1 up 81.39 percent, tomatoes up 75.11 percent, gents sponge chappal up 50.25 percent, mustard oil up 46.16 percent, cooking oil 5 litre up 45.61 percent, gents sandal up 44.49 percent, washing soap up 41.74 percent, vegetable ghee 1kg up 41.11 percent and 2.5kg up 40.8 percent, and pulse masoor up 38.78 percent.

Major decrease was observed in the prices of pulse moong down 26.41 percent, chilli powder down 22.44 percent, chicken down 11.19 percent, and onions down 2.06 percent.