06 June 2004	Sunday	17 Rabi-us-Saani 1425

KARACHI, June 5: Families with monthly income of Rs3,000-12,000 confronted with a back-breaking annual inflation of 11.6 per cent as measured by the Sensitive Price Indicator during the week ending June 3, 2004.

This unusually high rate of inflation cannot and should not be taken lightly only because it reflects changes in the price levels during just one week: Though obtained weekly, this year-on- year increase in the SPI is in line with the monthly increase in the SPI that has been much higher than the rise in CPI (Consumer Price Indicator).

Whereas the CPI rose by six per cent in April 2004, the SPI moved up by 8.4 per cent.

The Federal Bureau of Statistics, which compiles inflation figures, conducts market surveys for reporting changes in prices of the items covered under the SPI from Friday to Thursday. The current SPI for the week ending on June 3 reflects changes in prices of 53 essential items of daily use.

The latest data released by the FBS shows that during the week under review, the SPI shot up by 11.6 per cent year-on-year. Within the SPI, the prices of food items showed a phenomenal average increase of 14.2pc. That is where it hits the poor people harder because they spend a large share of their total monthly income on buying food items.

Out of 53 essential items, 32 fall in the food group. They are: wheat, wheat flour, rice basmati (broken), Irri-6, masoor, moong, mash, gram pulses, beef with bone, mutton, eggs, bread plain, sugar, gur or lumps of raw sugar, milk fresh, milk powdered, curd, vegetable ghee tin-packed, vegetable ghee loose, mustard oil, cooking oil packed, potatoes, onions, tomatoes, bananas, salt, red chillies, garlic, tea packed, tea prepared, cooked beef, cooked pulse.

Keeping in mind this list of food items, a 14.2pc year- on-year average increase in their prices at any given time means food inflation is pretty high for families whose monthly income ranges between Rs3,000 and Rs12,000.

What is more disturbing is that this big rise of 14.2 per cent is not specific to the week ending on June 3, 2004. It is rather a continuation of the previous trend.

For example, during the week ending on May 22, 2004, the prices of food items had risen by an average of 12.9 per cent year-on-year. The overall SPI during that week had shown a year-on-year increase of 10.9 per cent.