ISLAMABAD: Inflation measured by the Sensitive Price Index (SPI) increased by 1.32 per cent in the week ended July 6 from the previous week amid an increase in petrol and diesel prices to revive the International Monetary Fund’s extended fund facility programme.

The week-on-week increasing trend gradually slowed down owing to a slight decrease in prices of vegetables, according to Pakistan Bureau of Statistics (PBS) data released on Thursday.

The year-on-year increase in SPI was 33.66pc during the week under review.

The increase in the weekly inflation is the highest since the change of the base year for measuring the SPI. Petrol and diesel prices were raised by Rs84 and Rs115 per litre, respectively, while electricity tariffs were raised by 50pc.

The government has already announced in the budget that it will revive sales tax on petroleum products as well as impose a petroleum development levy in a phased manner. Last week, the government imposed Rs10 on petrol per litre, which will gradually increase to Rs50 per litre.

The government projected a modest inflationary annual target of 11.5pc for FY23 in the budget documents. However, the Federal Board of Revenue, which uses inflation as one of the measures to gather extra tax from consumers, has projected inflation at 12.8pc.

Former finance minister Shaukat Tarin projected that annual inflation would be in the range of 25pc to 30pc.

Published in Dawn, July 8th, 2022