ISLAMABAD: Inflation measured by the Sensitive Price Indicator (SPI) eased 0.57 per cent on a week-on-week basis for the period ending Oct 13 due to a slight decline in energy prices, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

On a year-on-year basis, the inflation posted an increase of 28.44pc driven by food and the highest-ever energy prices. The SPI posted four weekly declines since Sept 8, while it rose in two weeks.

Before this, the highest ever year-on-year increase in the SPI was 45.50pc recorded for the week ending on Sept 1 and 44.58pc for the week ending on Aug 25, 42.70pc in the week ending on Sept 8 and 42.31pc in the week ending on Aug 18.

The World Bank report for October predicted that the average Consumer Price Index (CPI) inflation in Pakistan will rise to an average of 23pc in FY23 from 12.2pc in FY22 due to higher domestic energy prices, flood disruptions, and the weaker rupee.

SPI eases 0.57pc week-on-week

The SBP has been tightening its monetary policy to contain surging inflation and the Rupee’s rapid depreciation. Since September 2021, the central bank has increased the policy rate by a cumulative 800 bps to reach 15pc, the highest rate since the 2008 global financial crisis.

Soaring vegetable prices due to damage to standing crops and a massive hike in electricity rates have also contributed to higher prices. The damage to standing crops will push up the prices of vegetables in the coming weeks.

The International Monetary Fund said in its country’s staff report that the average Consumer Price Index (CPI) inflation was expected to surge to 20pc in the current financial year, while core inflation would also remain elevated due to higher energy prices and the rupee’s decline.

The PDM government has projected a modest inflationary annual target of 11.5pc for the ongoing fiscal year.

The SPI monitors the prices of 51 essential items based on a survey of 50 markets in 17 cities across the country. During the week under review, the prices of 18 out of 51 items increased, 17 decreased, and 16 remained stable.

In the food items WoW basis, the prices of tomatoes decreased (13.51pc), eggs (2.12pc), pulse masoor (2.07pc), onions (1.57pc), pulse gram (1.39pc) and bananas (1.36pc). In the non-food items, LPG declined (2.74pc).

On the other hand, an increase was observed in the prices of a matchbox (5.65pc), powdered milk (3.82pc), firewood (2.09pc), bread plain (2.05pc), potatoes (1.78pc), cooked beef (1.47pc) and tea Lipton (1.24pc).

On a year-on-year basis, the items whose prices jumped the most included tomatoes (194.26pc), onions (167.89pc), diesel (92.08pc), petrol (76.07pc), pulse gram (69.25pc), pulse masoor (62.19pc), cooking oil 5 litre (60.14pc), washing soap (58.03pc), mustard oil (56.53pc), vegetable ghee 2.5 kg (56.30pc), pulse mash (55.61pc), pulse moong (53.72pc) and vegetable ghee 1 kg (53.59pc).

Published in Dawn, October 15th, 2022