Short-term inflation based on the Sensitive Price Index (SPI) saw a record increase to 45.64 percent for the combined income group for the week ending March 16 on a year-over-year basis, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday. This increase was driven by a steady rise in the price of essential commodities.
However, on a weekly basis, short-term inflation climbed by 0.96 percent due to rising prices for tomatoes, potatoes, cooking oil, and fruits.
While the full effects of devaluation including a rise in petroleum products, an increase in general sales tax, and increased energy expenses have not yet been fully reflected in official data the SPI is projected to worsen. A surge in demand would cause commodities prices to rise quickly.
Previously, in the week that concluded on September 1, 2022, the year-over-year SPI increased to 45.5 percent. For the first time since August 18 of last year, when the reading was 42.31 percent, it remained over 40 percent.
Among the 51 goods in the SPI basket 28 saw price increases, 11 saw price decreases and 12 had no change in price.
The items whose prices rose the most during the reviewed week compared to the same week a year prior were onions (233.89%), cigarettes (165.86%), gas charges for Q1 (108.38%), diesel (102.84%), tea Lipton (81.29%), petrol (81.17%), rice irri-6/9 (78.75%), rice basmati broken (78.10%), bananas (77.84%), eggs (72.19%), pulse moong (69 (55.36pc).
The biggest fluctuation was observed in the prices of tomatoes (18.06 percent), Lipton tea (9.26 percent), potatoes (4.52 percent), bananas (4 percent), sugar (2.70 percent), wheat flour (2.40 percent), cooking oil 5 liters (1.20 percent), vegetable ghee 2.5 kilograms (1.16 percent), lawn (5.77 percent), diesel (4.65 percent), shirts (2.80 percent) and gasoline (1.84pc).
Onions (15.91%), chicken (5.97%), garlic (5.73%), pulse masoor (2.27%), eggs (2.26%), LPG (1.90%), vegetable ghee 1 Kg (1.39%), pulse gram (1.24%), pulse mash (1.08%), pulse moong (0.84%) and mustard oil were the products whose prices fell the most over the previous week (0.64%).
Under the International Monetary Fund (IMF) program, the government has been taking strict measures to raise money to close the fiscal deficit which could have the effect of slowing economic growth and increasing inflation in the near future. These measures include increases in fuel and power prices, the withdrawal of subsidies, a market-based exchange rate, and higher taxes.
Retail prices of consumer products will rise further as a result of the policy rate’s increase to 20 percent, the general sales tax rate’s increase to 18 percent on most items, and 25 percent on more than 800 imported food and non-food items.