ISLAMABAD: Short-term inflation, based on the Sensitive Price Index (SPI), rose to an unprecedented 46.65 per cent year-on-year for the combined income group for the period ending March 22, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

However, on a week-on-week basis, the weekly inflation rose sharply by 1.80pc with food items getting costlier, particularly fruits, tomatoes, potatoes and cooking oil.

The SPI is expected to intensify further as the worse impact of inflation in the wake of Ramazan-related demand spiral, rupee devaluation, costly petroleum products, hike in general sales tax and higher electricity and gas tariffs is yet to reflect in official data. The commodity prices are expected to show a rapid increase with rising demand in the coming week.

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

Out of 51 items in the SPI basket, prices of 26 items soared while those of 12 items decreased, however, rates of 13 items remained unchanged.

During the week under review, the items whose prices increased the most over the same week a year ago were onions (228.28pc), cigarettes (165.88pc), wheat flour (120.66pc), gas charges for Q1 (108.38pc), diesel (102.84pc), tea Lipton (94.60pc), bananas (89.84pc), rice Irri-6/9 (81.51pc), rice basmati broken (81.22pc), petrol (81.17pc), eggs (79.56pc), pulse moong (68.64pc), potatoes (57.21pc) and pulse mash (56.46pc).

On a week-on-week basis, the biggest change was observed in the prices of tomatoes (71.77pc), wheat flour (42.32pc), potatoes (11.47pc), bananas (11.07pc), tea Lipton (7.34pc), pulse mash (1.57pc), tea prepared (1.32pc), gur (1.03pc), georgette (2.11pc), Lawn (1.77pc) and long cloth (1.58pc).

Products whose prices saw the highest decline over the previous week were chicken (8.14pc), chillies powdered (2.31pc), LPG (1.31pc), mustard oil & garlic (1.19pc) each, pulse gram & onions (1.06pc) each, vegetable ghee 1 Kg (0.83pc), cooking oil 5 litre (0.21pc), pulse moong (0.17pc), pulse masoor (0.15pc) and eggs (0.03pc).

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

Published in Dawn, March 25th, 2023