In a concerning development, the Sensitive Price Indicator (SPI), which tracks 51 essential commodities, recorded a 24.39% increase in weekly inflation, ending on August 8, 2023, compared to the same period last year. This surge in prices is taking a toll on households, squeezing their disposable income and limiting their purchasing power.
During the week, several crucial kitchen essentials experienced fresh price hikes, including wheat-flour, sugar, rice, chicken, powdered milk, and gas prices, as reported by the Pakistan Bureau of Statistics (PBS) on Friday. Furthermore, the bureau noted that inflation increased by 0.54% during the reviewed week compared to the preceding one.
Arif Habib Limited commented on the situation, stating that the 24.39% inflation rate, when measured on a yearly basis, marks a 64-week low. This figure represents the “lowest year-on-year increase since June 9, 2022.”
Read CPI inflation expected to slow down
Experts have attributed this volatile inflation trend to the persistent rise in power and gas tariffs. Additionally, the government’s practice of passing on increases in international oil prices to local consumers has exacerbated concerns. These rising prices come at a time when salaries have largely remained stagnant for the past couple of years.
Breaking down the SPI data, PBS revealed that out of the 51 items tracked, prices of 20 items (39.22%) increased, 8 items (15.68%) decreased, and 23 items (45.10%) remained stable in the reviewed week compared to the previous one.
Examining the year-on-year figures for the week, PBS reported significant price hikes in several essential items, including wheat flour (126.26%), Q1 gas charges (108.38%), cigarettes (101.29%), sugar (94.06%), Lipton tea (93.94%), and basmati broken rice (89.04%). Conversely, prices of onions decreased by 57.06%, tomatoes dropped by 48.77%, Q1 electricity rates reduced by 21.96%, and pulse masoor prices fell by 9.04%.
In light of the concerning inflationary trend, the financial markets are anticipating further interest rate hikes by the central bank in the upcoming monetary policy meeting scheduled for Sept 14.
Published in The Express Tribune, September 2nd, 2023.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.