ISLAMABAD: Short-term inflation, based on the Sensitive Price Index (SPI), saw a record increase to 45.64 per cent for the combined income group on a year-on-year basis for the week ending March 16 fuelled by consistent increase the price of essential commodities, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

However, on a week-on-week basis, the short-term inflation increased by 0.96pc as tomatoes, potatoes, cooking oil and fruits becoming costlier.

The SPI is expected to intensify further as the full impact of depreciation, increase in petroleum products, hike in general sales tax and higher energy costs is yet to reflect in official data. The commodity prices would show a rapid increase with a spike in demand.

Earlier the year-on-year SPI surged to 45.5pc during the week ended on Sept 1, 2022. It stayed above 40pc for the first time since Aug 18 last year when the reading was 42.31pc.

Of the 51 items in the SPI basket, prices of 28 items soared while those of 11 items decreased, however, rates of 12 items remained unchanged.

During the week under review, the items whose prices increased the most over the same week a year ago were onions (233.89pc), cigarettes (165.86pc), gas charges for Q1 (108.38pc), diesel (102.84pc), tea Lipton (81.29pc), petrol (81.17pc), rice irri-6/9 (78.75pc), rice basmati broken (78.10pc), bananas (77.84pc), eggs (72.19pc), pulse moong (69.44pc), wheat flour (56.27pc) and bread (55.36pc).

On a week-on-week basis, the biggest change was oberved in the prices of tomatoes (18.06pc), tea Lipton (9.26pc), potatoes (4.52pc), bananas (4pc), sugar (2.70pc), wheat flour (2.40pc), cooking oil 5 litre (1.20pc), vegetable ghee 2.5 Kg (1.16pc), lawn (5.77pc), diesel (4.65pc), shirting (2.80pc) and Petrol (1.84pc).

Products whose prices saw the highest decline over the previous week were onions (15.91pc), chicken (5.97pc), garlic (5.73pc), pulse masoor (2.27pc), eggs (2.26pc), LPG (1.90pc), vegetable ghee 1 Kg (1.39pc), pulse gram (1.24pc), pulse mash (1.08pc), pulse moong (0.84pc) and mustard oil (0.64pc).

The government has been taking strict measures — hikes in fuel and power tariffs, withdrawal of subsidies, market-based exchange rate and higher taxation — under the International Monetary Fund (IMF) programme to generate revenue for bridging the fiscal deficit, which may result in slow economic growth and higher inflation in coming months.

The increase in the policy rate to 20pc, general sales tax rate from 17pc to 18pc on most items, and to 25pc on more than 800 imported food and non-food items will further increase retail prices of consumer goods.

Published in Dawn, March 18th, 2023