Weekly inflation eases slightly, falls to 42.7pc from record high

ISLAMABAD: After an all-time high inflation of 45.5 per cent recorded last week on a year on year (YoY) basis, inflation this week slightly decelerated to 42.7pc.

The weekly inflation measured by the Sensitive Price Indicator (SPI) posted a slight decline of 0.58pc on a week-on-week (WoW) basis that ended on September 8, data by the Pakistan Bureau of Statistics (PBS) showed on Friday.

Before this, the highest ever YoY increase in the SPI was 45.50pc recorded for the week ending on September 1 and 44.58pc, recorded for the week ending on August 25 and 42.31pc in the week ending on Aug 18.

The latest data shows that the SPI dipped slightly on a week-on-week basis, mainly because of a major drop in food prices especially tomatoes and onions on account of imports from Afghanistan and Iran. The highest WoW increase in inflation was recorded at 3.68pc for the week that ended on July 28.

Soaring vegetable prices due to damage to standing crops and a massive hike in electricity rates have also contributed to higher prices. The damage to standing crops will push up the prices of vegetables in the coming weeks.

An increase was observed in the prices of LPG (10.66pc), wheat flour (4.15pc), eggs (3.96pc), bread (3.27pc), pulse moong (2.74pc), curd (2.72pc), tea lipton (2.50pc), pulse gram (1.65pc), chicken (1.58pc), milk fresh (1.57pc), fire wood (1.54pc) and potatoes (1.02pc).

On a year-on-year basis, the items whose prices jumped the most included tomatoes (144.25pc), diesel (114.08pc), petrol (98.73pc), pulse masoor (76.34pc), cooking oil 5 liter (67.99pc), mustard oil (66.53pc), LPG (64.98pc), washing soap (64.50pc), electricity (63.03pc), vegetable ghee 2.5 Kg (62.53pc), pulse gram (61.02pc), onions (59.97pc) and vegetable ghee 1 Kg (58.19pc).

Meanwhile, the government has exempted duty and taxes on import of tomatoes and onions. The duty and taxes relief per kg will be nearly Rs10, while the impact on the tomatoes will be negligible. However, the import of these products will accelerate further in the coming days. 

In its most recent staff report, the International Monetary Fund (IMF) said that the average Consumer Price Index (CPI) inflation was expected to surge to 20pc in the current financial year (FY23) while core inflation would also remain elevated due to higher energy prices and the rupee’s decline 

The SPI monitors the prices of 51 essential items based on a survey of 50 markets in 17 cities of the country. During the week under review, the prices of 26 out of 51 items increased, nine decreased and 16 remained stable.