Weekly inflation, measured by the Sensitive Price Index (SPI), has surged to new highs for the third consecutive week.
Official data revealed a year-on-year increase of 38.66 percent in short-term inflation for the week ending on September 21, marking an alarming trend in rising prices. The ongoing depreciation of the Pakistani rupee, coupled with soaring petrol prices, sales tax burdens, and mounting electricity bills are identified as the primary contributors to the persistent inflationary trend.
But the most important factor contributing to inflation is the steep increase in petroleum products. During the week under review, the retail price of petrol witnessed an 8.51 percent increase, while diesel prices rose by 5.54 percent. These price hikes have led to elevated transport costs and have subsequently driven up the cost of moving goods, affecting consumers across the country.
To meet local demand, Pakistan has become increasingly reliant on imports of essential vegetables, including tomatoes, onions, and potatoes, primarily sourced from neighboring Afghanistan. However, a glimmer of relief was seen in the prices of some vegetables after the Torkham border with Afghanistan was reopened.
The SPI basket, comprising 51 essential items, demonstrated notable fluctuations. Prices of 22 goods soared, 11 experienced price drops, and 18 remained unchanged compared to the previous week.
Key items that witnessed substantial price increases compared to the same week the previous year include electricity charges, gas charges, cigarettes, rice, sugar, wheat flour, and more. Whereas, on a week-on-week basis, the largest price increases were observed in chicken, garlic, onions, shirting fabric, and matchboxes.
It is pertinent to mention here that according to the latest International Monetary Fund (IMF) forecast, the average Consumer Price Index (CPI) for the current fiscal year is projected to be 25.9 percent, slightly down from the previous year’s 29.6 percent.
In contrast to the overall trend, prices of certain items, such as tomatoes, sugar, bananas, potatoes, and various food items, recorded decreases on a week-on-week basis.