ISLAMABAD: Short-term inflation, measured by the Sensitive Price Index (SPI), surged for the fifth straight week due to tax measures enacted in the budget that led to a high cost of living, official data showed on Friday.
The SPI-based inflation rose 23.59 per cent year-on-year in the week ending July 4. On a week-on-week basis, it increased by 1.28pc.
The PML-N government’s decision to allow sugar exports has resulted in a sharp increase in the domestic prices of sweetener across the country.
Several indirect taxes imposed through the Finance Act 2024 since July 1 have fuelled inflation. The costs of pharmaceutical, stationery, and poultry products began to rise following the imposition of a sales tax on these items in the last budget.
The government has also reversed the falling trend in petroleum product prices, jacking up the petrol and diesel rates from July 1. The enormous growth in non-food prices has fuelled both short-term and monthly inflation.
The increase in sales tax and customs duty on fresh vegetables and fruits imported from Iran and Afghanistan has also contributed to food inflation.
The weekly inflation hit a record 48.35pc year-on-year in early May 2023, but then decelerated as low as 24.4pc in late Aug 2023 before surging past 40pc during the week ending on Nov 16, 2023.
The items whose prices saw the increase week-on-week included tomatoes (70.77pc), wheat flour (10.57pc), powdered milk (8.90pc), diesel (3.58pc), petrol (2.88pc), pulse gram (2.87pc), pulse moong (2.86pc), chicken (2.40pc), LPG (1.63pc), garlic (1.54pc), pulse masoor (1.10pc) and sugar (0.93pc).
The items whose prices decreased the most over the previous week included onions (9.05pc), potatoes (1.04pc), eggs (0.79pc), bananas (0.60pc) and bread (0.02pc).
However, on an annual basis, the items whose prices increased the most included gas charges for Q1 (570pc), tomatoes (161.12pc), onions (79.04pc), chillies powder (55pc), garlic (36.13pc), pulse gram (32.45pc), salt powder (29.54pc), shirting (27.08pc), pulse moong (26.40pc), powered milk (25.78pc), gents sandal (25.01pc), pulse mash (22.21pc), beef (21.95pc), electricity charges for Q1 (21.46pc) and LPG (21.15pc).
In contrast, the prices of wheat flour dropped 28.25pc followed by chicken (28.23pc), cooking oil 5 Litre (15.17pc), vegetable ghee 2.5 Kg (12.54pc), vegetable ghee 1 Kg (11.49pc), mustard oil (8.31pc), bananas (4.52pc), tea Lipton (2.52pc) and rice basmati broken (1.35pc).
The SPI stood at 318.61 compared to 314.57 the preceding week and 257.79 a year ago.
The index, comprising 51 items collected from 50 markets in 17 cities, is computed weekly to assess the prices of essential commodities and services at shorter intervals.
Data showed that the prices of 29 items increased, those of 5 items decreased, and 17 items remained stable compared to the previous week.
Published in Dawn, July 6th, 2024
