ISLAMABAD: Inflation measured by the Sensitive Price Indicator (SPI) rose sharply in the week that ended on Aug 18, climbing to a record 42.3 per cent year-on-year, the Pakistan Bureau of Statistics data showed on Friday.

Before this, the highest ever year-on-year increase in the SPI was 38.63pc, recorded for the week ending on Aug 5.

The latest data shows that the SPI rose by 3.35pc over last week, mainly because of higher food prices. The highest week-on-week increase in inflation was recorded at 3.68pc for the week that ended on July 28.

Soaring vegetable prices due to damage to standing crops and a massive hike in power rates have also contributed to higher prices.

The government has already ann­ounced in the budget that it would revive sales tax on petroleum products as well as impose a petroleum development levy in phases. As a result, petrol and diesel prices are expected to increase for the next quarter.

The government projected a modest inflationary annual target of 11.5pc for the ongoing fiscal year. However, the Federal Board of Revenue, which uses inflation as one of the measures to gather additional tax from consumers, has projected inflation at 12.8pc. Independent economists estimate inflation to remain around 25pc to 30pc.

The SPI monitors the pri­ces of 51 essential items ba­sed on a survey of 50 markets in 17 cities of the country.

During the week under rev­iew, the prices of 25 out of 51 items increased, 11 dec­r­eased and 15 remained stable.

The highest week-on-week incr­ease was noted in the prices of tomatoes 20.3pc, chicken 7.6pc, onions 2.3pc, powdered milk 2pc, eggs 1.6pc, pulse moong 1.4pc, and potatoes 1.07pc. As for non-food items, the price of electricity jumped 6.8pc, petrol 3pc and cigarettes 1.7pc.

In contrast, the items whose prices saw the highest week-on-week decrease were LPG 3.5pc, vegetable ghee 1.2pc, garlic 0.9pc, mustard oil 0.7pc, and pulse masoor 0.4pc.

On a year-on-year basis, the items whose prices jumped the most included pulse masoor 111pc, diesel 108.8pc, petrol 96pc, onions 94pc, five-litre cooking oil pack 72.9pc, mustard oil 71pc, chicken 69pc, ikg vegetable ghee packet 68.6pc, 2.5kg vegetable ghee 67pc, electricity 63pc, washing soap 61.9pc, pulse gram 58.9pc, gents sponge chappal 52.2pc, pulse mash 51.5pc and garlic 36.6pc.

The SPI increased by 1.8pc for the lowest income group (i.e. people earning below Rs17,732 per month) and by 3.94pc for the group with a monthly income above Rs44,175.

Published in Dawn, August 20th, 2022