Monitoring Desk
ISLAMABAD: Consumer prices rose significantly in the previous week due to increases in onions, chicken, eggs, rice, cigarettes, and fuel, pushing weekly inflation to more than 40% for the first time in more than five months according to official data released on Friday.
Though week-on-week inflation fell slightly, it remained high as bananas, chicken, sugar, cooking oil, gas, and cigarettes became more expensive, according to the Pakistan Bureau of Statistics (PBS). As a result, short-term inflation, as measured by the Sensitive Price Indicator (SPI), increased to 41.54 percent year on year for the week ended February 23, up from 38.42 percent the previous week.
The price increase is the largest annual increase since the week ending September 8, 2022, when SPI inflation was 42.7 percent. And it was above 40% for the first time since September 15, when it was 40.58 percent. Inflation fell to 2.78 percent from 2.89 percent the previous week. The prices of 33 of the 51 items tracked increased, six items decreased, and 12 items remained stable. The previous week-on-week reading of 2.89pc was the highest since Oct 27, when the change in SPI was 4.13pc, according to official data.
Cigarettes 164.7pc, gas 108.38pc, chicken 85.7pc, Onions 372pc, diesel 81.36pc, eggs 75.81pc, Irri 6/9 rice 75.41pc, bananas 72.22pc, broken basmati rice 74.16pc, washed moong pulse 70.39pc, and petrol 69.87pc were the items whose prices increased the most compared to the same week last year. In contrast, the lowest-income group experienced the greatest year-on-year drop in tomato prices (-67.93%), chilli powder -7.42pc, and electricity charges (-6.64pc).
Prices for gas increased by 108.4 percent (for the lowest-income group), cigarettes increased by 76.45 percent, bananas increased by 6.67 percent, chicken increased by 5.27 percent, sugar increased by 3.37 percent, cooking oil five-litre tin increased by 3.07 percent, vegetable ghee 2.5kg pack increased by 2.79 percent, vegetable ghee 1kg pack increased by 2.2 percent, and prepared tea increased by 1.09 percent.
Onions -13.84pc, eggs -5.5pc, tomatoes -4.23pc, garlic -3.03pc, LPG -0.81pc, and gramme pulse -0.21pc saw the greatest price decreases compared to the previous week. Meanwhile, headline inflation as measured by the Consumer Price Index (CPI) was 27.6 percent in January. However, the government has implemented stringent measures in accordance with IMF guidelines, which are likely to further cool the economy and fuel inflation.
To bridge the fiscal deficit, the government has already implemented a number of measures, including the adoption of a market-based exchange rate, increases in fuel and power tariffs, the withdrawal of subsidies, and increased taxation. Officials say the lender is still negotiating with Islamabad over power sector debt and a possible increase in the interest rate.
The country’s economy has been in turmoil and desperately requires external financing, with foreign exchange reserves falling to around $3 billion, barely enough for three weeks of imports. China announced a refinancing of $700 million this week, which the State Bank of Pakistan received on Friday.
