ISLAMABAD: Weekly inflation recorded a year-on-year surge of 29.83 per cent for the week ending on Aug 3 due to a sharp rise in petroleum and food 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 1.30pc, the second-highest increase in the past two months.

The petrol retail price was raised by 7.86pc, diesel by 7.82pc and LPG by 9.82pc during the period under review.

Of the 51 items in the SPI basket, prices of 23 goods soared, seven dropped and 21 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 (131.40pc), cigarettes (109.57pc), gas charges for Q1 (108.38pc), tea Lipton (97.71pc), rice basmati broken (82.86pc), rice Irri-6/9 (72.73pc), tomatoes (67.54pc), chilli powder (66.74pc), sugar (64.12pc), chicken (60.51pc), gents sponge chappal (58.05pc), gur (57.75pc) and potatoes (55.75pc).

The biggest rise week-on-week was noted in the price of tomatoes (16.85pc) followed by chillies powder (7.58pc), garlic (5.71pc), onion (5.50pc), powdered milk (5.17pc), eggs (3.86pc) and rice basmati broken (2.06pc).

The SPI has been decelerating for the last eight weeks due to a small drop in petroleum prices in June. In May, the SPI stayed above 45pc for three weeks after hitting an all-time high at 48.35pc on May 4.

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

According to the latest IMF forecast, the average Consumer Price Index (CPI) for the current fiscal year is projected to be 25.9pc from the previous year’s 29.6pc.

Meanwhile, a decrease was also observed on a week-on-week basis in prices of mustard oil (1.63pc), chicken (1.40pc), vegetable ghee

1kg (0.51pc), vegetable ghee 2.5kg (0.36pc), pulse gram (0.22pc), wheat flour (0.20pc) and pulse moong (0.03pc).

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 growth and higher inflation in coming months.

Published in Dawn, Aug 5th, 2023