ISLAMABAD: The short-term inflation experienced a notable year-on-year surge of 29.21 per cent for the week ending on July 26 mainly attributed to a sharp rise in electricity and liquefied petroleum gas prices, showed the official data released on Friday.

On a week-on-week basis, the short-term inflation, measured by the Sensitive Price Index (SPI), rose 3.73pc, the highest increase in the past two months.

The electricity charges were raised by 20.98pc and LPG 4.12pc during the period under review.

Of the 51 items in the SPI basket, prices of 20 goods soared, seven dropped and 24 remained unchanged compared to the previous week.

During the week under review, the items whose prices increased the most over the same week a year ago were: wheat flour (132.36pc), cigarettes (110.75pc), gas charges for Q1 (108.38pc), tea Lipton (97.71pc), rice basmati broken (79.60pc), rice Irri-6/9 (73.23pc), sugar (63.72pc), potatoes (62.65pc), tomatoes (60.50pc), gents sponge chappal (58.05pc), gur (57.57pc), powdered chillies (55pc) and chicken (54.52pc).

On a week-on-week basis, the biggest rise was recorded in the prices of powdered chillies (28.98pc), tomatoes (19.71pc), eggs (4.77pc), LPG (4.12pc), garlic (3.09pc), onion (2.58pc), gur (2.18pc) and potatoes (2.09pc).

The SPI in the last eight weeks slightly decelerated, which can be attributed to a small drop in petroleum prices. In May, the SPI stayed above 45pc for three weeks after hitting an all-time high at 48.35pc on May 4.

The depreciation of the rupee, rising petrol prices, an increase in sales tax and higher electricity bills are among the key contributors to this inflationary trend.

The IMF has projected that the average Consumer Price Index (CPI) will be 25.9pc in FY24, a notable decrease from the previous year’s 29.6pc. However, it’s worth noting that it is expected to ease below 20pc only in the fourth quarter of the current fiscal year.

Despite this positive outlook, price pressures are still expected to remain high, mainly due to the delayed implementation of monetary tightening and elevated inflation expectations.

Meanwhile, a decrease was also observed on a week-on-week basis in prices of bananas (5.36pc), sugar (1.15pc), vegetable ghee 2.5 kg (0.93pc), cooking oil 2.5 kg (0.89pc), vegetable ghee 1 kg (0.72pc), wheat flour (0.17pc) and pulse moong (0.16pc).

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

Published in Dawn, July 29th, 2023