ISLAMABAD: Short-term inflation, based on the Sensitive Price Index (SPI), slightly eased but remained at an elevated level of 44.49 per cent for the combined income group on a year-on-year basis for the week ending April 6, data issued by the Pakistan Bureau of Statistics (PBS) showed on Friday.

However, on a week-on-week basis, the SPI recorded an increase of 0.92pc with food items getting costlier, particularly fruits, potatoes and cooking oil in wake of the Ramazan-related demand spiral.

On a year-on-year basis, weekly inflation has stayed above 40pc since late February. However, after hitting a record high of 46.7pc in the week ending March 22, it has slightly eased in the previous two weeks.

The SPI is expected to intensify further due to other domestic and international factors, including rupee devaluation, costly petroleum products, hikes in general sales tax and higher electricity and gas tariffs.

Following the export of sugar, the retail price of sugar reached Rs130 per kg in markets, however, sugar’s outflow was eased upon the request of sugar mill owners associated with the incumbent government.

Likewise, the price of 20 kg flour is being sold at Rs3,200 by the retailers, which is higher than its price in rural areas and northern Khyber Pakh­tunkhwa. A similar trend was observed in the prices of cooking oil and vegetable ghee in the past couple of weeks.

Out of 51 items in the SPI basket, prices of 27 items increased while those of 7 items decreased, however, rates of 17 items remained unchanged.

During the week under review, the items whose prices increased the most over the same week a year ago were wheat flour (131.72pc), gas charges for Q1 (108.38pc), diesel (102.84pc), eggs (98.34pc), tea Lipton (97.63pc), rice basmati broken (84.92pc), bananas (82.23pc), petrol (81.17pc), rice Irri-6/9 (80.61pc), pulse moong (68.14pc), potatoes (65.95pc), pulse mash (56.70pc) and onions (55.75pc).

On a week-on-week basis, the biggest change was observed in the prices of chicken (15.87pc), sugar (13.48pc), potatoes (5.11pc), bananas (4.95pc), wheat flour (3.10pc), gur (2.12pc), eggs (1.26pc), milk fresh (1.24pc) and long cloth (1.95pc).

Products whose prices saw the highest decline over the previous week were tomatoes (14.96pc), onions (12.66pc), LPG (3.73pc), pulse gram (1.20pc), vegetable ghee 2.5 Kg (0.71pc), garlic (0.16pc) and mustard oil (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 to bridge the fiscal deficit, which may result in slow economic growth and higher inflation in coming months.

The government has been taking strict measures under IMF conditions that are likely to further cool the

economy and stoke inflation. The 100bps hike in the policy rate to 21pc, and general sales tax from 17pc to 18pc will further increase retail prices of consumer goods.

Published in Dawn, April 8th, 2023