Weekly inflation spikes 28.05pc on annualised basis

KARACHI: Sharp increase in food and fuel prices pushed Pakistan’s weekly inflation up 28.05 percent year-on-year and 1.01 percent week-on-week during the seven-day period ended June 23.

The Pakistan Bureau of Statistics (PBS) data issued on Friday attributed the YoY spike in sensitive price indicator (SPI) to rising prices of diesel (132.61 percent), onions (128.92 percent), petrol (110.16 percent), vegetable ghee 1kg (85.74 percent), pulse masoor (81.73 percent), mustard oil (79.59 percent), cooking oil 5 litre (76.91 percent), vegetable ghee 2.5kg (73.02%), tomatoes (72.33 percent), garlic (54.03 percent), washing soap (52.73 percent), gents sponge chappal (52.21 percent), LPG (49.65 percent) and pulse gram (46.46 percent).

Fahad Rauf, head of research at Ismail Iqbal Securities, said inflationary pressures continue, with milk and cooking oil contributing the most towards weekly increase. The pressures would likely continue as electricity and gas prices were expected to be increased soon.

Based on current numbers, Rauf forecast June 2022 consumer price index (CPI) to stand at 17.6 percent. “To note, PM package on electricity subsidy removal is not yet reflected in SPI readings. If removal is incorporated, CPI would reach 19 percent YoY,” he added. The PBS data attributes different weightages to the commodities in the SPI basket. Electricity weightage stands at 8.36 percent while petrol and diesel stand at 6.7 and 0.087 percent, respectively.

Analysts expect inflation to hit over a decade high after all measures needed to restart the International Monetary Fund (IMF) loan programme have been put in place by the current government, including increase in fuel prices as well as higher power and gas tariffs. The SPI is computed on weekly basis to assess the price movements of essential commodities at a shorter interval of time to review the price situation in the country. It comprises 51 essential items and the prices are collected from 50 markets in 17 cities of the country.