Pakistan is grappling with a significant increase in short-term inflation, as indicated by the Sensitive Price Index (SPI), which has risen by 37.07% year-on-year for the week ending October 5, according to official data.
This recent surge marks the fourth consecutive week of rising short-term inflation and is primarily attributed to the substantial increase in retail prices of petroleum products. The consequences of this inflationary trend are notably felt in various sectors, particularly with amplified transportation costs.
The rise in inflation is evident in the week-on-week increase of 0.11% from the preceding week, signifying a continuous upward trajectory in prices.
In the previous week, the caretaker government had marginally reduced the prices of petroleum products after a series of increases spanning over three successive fortnights. These price fluctuations led to an upward adjustment in transport fares, contributing to the overall inflationary pressure. The cost of moving goods also escalated due to higher fuel prices. To meet the demand, the country has been resorting to imports of essential vegetables such as tomatoes, onions, potatoes, and various other items from Afghanistan.
While the reopening of the Torkham border with Afghanistan provided some relief in the prices of a few vegetables, short-term inflation remained elevated. Notably, the prices of 19 goods out of the 51 items in the SPI basket surged during this period, while 16 items experienced price drops, and 16 remained unchanged compared to the previous week.
The week under review witnessed significant year-on-year increases in the prices of various commodities, including electricity charges for Q1 (118.16%), gas charges for Q1 (108.38%), cigarettes (94.69%), rice basmati broken (87.60%), chilli powder (84.84%), sugar (79.55%), rice Irri-6/9 (78.69%), wheat flour (77.91%), gur (67.68%), tea Lipton (60.72%), gents sponge chappal (58.05%), salt (56.48%), garlic (54.78%), gents sandal (53.37%), petrol (43.70%), and potatoes (42.99%).
The largest week-on-week price increases were observed in tomatoes (12.45%), onions (11.96%), garlic (2.59%), potatoes (1.81%), cooked daal (1.27%), eggs (0.84%), beef (0.53%), bread (0.52%), LPG (3.11%), firewood (0.76%), and long cloth (0.51%).
This inflationary trend is attributed to factors such as rupee depreciation, rising petrol prices, sales tax, and electricity bills. According to the latest IMF forecast, the average Consumer Price Index (CPI) for the current fiscal year is projected to be 25.9%, down from the previous year’s 29.6%.
