Short-term inflation surpasses 40% for second consecutive week

Caretaker Finance Minister Shamshad Akhtar is optimistic about a gradual reduction in inflation

The annual short-term inflation for the week ending November 23 remained elevated at 41.13 percent, according to official data released by the Pakistan Bureau of Statistics (PBS) on Friday.

This marks the second consecutive week with inflation exceeding 40 percent, primarily attributed to a significant surge in gas prices, which stood over 1,100 percent higher than the previous year.

The key drivers behind the inflationary trend were outlined, with gas prices leading the surge, followed by notable increases in the prices of cigarettes (94pc), wheat flour (88.2 pc), chili powder (81.7 pc), broken basmati rice (76.6 pc), garlic (71 pc), Irri-6/9 rice (62.3 pc), gents’ sponge chappal (58 pc), gents’ sandal (53.37 pc), branded tea (53 pc), gur (50.8 pc), and potatoes (47.9 pc).

However, certain items experienced a decline in prices year-on-year, with onions leading the way with a drop of 36.2 percent, followed by tomatoes (-18.1pc), mustard oil (-4 pc), and vegetable ghee (-2.9 pc).

On a week-on-week basis, the consumer prices remained unchanged, in stark contrast to the previous week when prices spiked by 10 percent due to the hike in gas prices.

The Sensitive Price Indicator (SPI), comprising 51 items collected from 50 markets in 17 cities, is calculated weekly to assess the prices of essential commodities and services at shorter intervals. The SPI was reported at 308.90, compared to 309.09 in the preceding week.

According to PBS data, prices of 18 items increased, 12 items decreased, and 21 items remained stable compared to the previous week.

Items witnessing the highest week-on-week increases included garlic (4.6 pc), onion (2.4pc), chicken (1.8 pc), potatoes (1.7 pc), pulse masoor (1.01 pc), LPG (0.8 pc), firewood (0.6 pc), wheat flour (0.54 pc), matchbox (0.52 pc), pulse moong (0.52 pc), and plain bread (0.47 pc).

Conversely, items experiencing the most significant decreases included tomatoes (-5.8 pc), vegetable ghee (-1.4 pc), cooking oil (-1.3 pc), banana (-0.9 pc), vegetable ghee (-0.82 pc), eggs (-0.33 pc), sugar (-0.2 pc), and packed tea (-0.17 pc).

On an annual basis, SPI inflation hit a record 48.35 percent in early May, subsequently cooling to 24.4 percent in late August, before surpassing the 40 percent threshold during the week ending November 16.

Caretaker Finance Minister Shamshad Akhtar expressed confidence that inflation would gradually decrease, attributing this positive outlook to the improved financial management of the country.

Speaking before the Senate on Friday, she highlighted the enhancements in financial management and anticipated a corresponding decline in inflation over time

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