Short-term inflation surges to 12.31pc due to costly food, LPG

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A Pakistani vegetable market.—Reuters/file
A Pakistani vegetable market.—Reuters/file

ISLAMABAD: Short-term inflation rose to 12.31 per cent year-on-year in the week ending Nov 5, driven largely by liquefied petroleum gas (LPG) and perishable food products, according to official data released by the Pakistan Bureau of Statistics (PBS) on Friday.

The index, comprising 51 items whose prices are collected from 50 markets in 17 cities, is calculated weekly to track changes in the prices of essential commodities and services.

Short-term inflation has remained in the double digits for several consecutive weeks, largely on the back of persistent increases in petroleum and diesel prices. However, the oil prices have been slowly declining for the past three consecutive days.

The impact of this decline will be visible in the next review. However, the unprecedented increase in the LPG price caused short-term inflation to rise.

The data showed that of the 51 essential items monitored during the week, the prices of 21 commodities (41.18pc) increased, while those of 10 items (19.60pc) declined. Meanwhile, the prices of 20 items (39.22pc) remained unchanged from the previous week.

The Sensitive Price Index (SPI), which tracks short-term inflation, increased slightly by 0.29pc week-on-week, reflecting price fluctuations in both food and non-food items.

Unwilling to reduce the petroleum levy, the government has continued to raise petrol and diesel prices. The surge in energy costs is not only fuelling inflationary pressures but also indirectly boosting sales tax collections through higher prices of goods and services.

This is an example of cost-push inflation, in which rising energy costs lead to increases in food prices. As a result, households are facing mounting pressure from higher consumer prices.

The items that recorded the highest price increases over the previous week included tomatoes (54.18pc), LPG (3.72pc), potatoes (2.07pc), eggs (1.17pc), garlic (1.06pc), firewood (1.01pc), salt powder (0.91pc), bread plain (0.64pc), milk fresh (0.49pc), curd (0.41pc), match box (0.16pc) and shirting (0.15pc).

The items that recorded week-on-week price declines included petrol (4.20pc), diesel (2.97pc), pulse gram (1.08pc), banana (0.85pc), onions (0.82pc), powdered milk (0.73pc), chicken (0.61pc), sugar (0.40pc), wheat flour (0.34pc) and pulse moong (0.27pc).

On an annual basis, the items that recorded the highest price increases included LPG (114.88pc), tomatoes (78.89pc), electricity for Q1 (52.38pc), diesel (39.27pc), petrol (36.34pc), wheat flour (33.95pc), chicken (31.81pc), chilies powder (15.55pc), mutton (14.54pc), onions (13.64pc), bread plain (12.35pc) and beef (11.06pc).

In contrast, potato prices fell by 37.24pc, followed by eggs (27.59pc), sugar (25.03pc), salt powder (14.09pc), gur (7.75pc), pulse masoor (7.49pc), pulse moong (6.79pc) and rice IRRI-6/9 (1.79pc).

Last week, short-term inflation rose to 11.32pc year-on-year, driven largely by higher LPG, wheat flour and perishable products prices, according to data released by the PBS.

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