Key Takeaways
- Short-term inflation rose to 11.85% year-on-year in the week ending October 22.
- Wheat flour prices increased by 1% compared to the previous week.
- The Sensitive Price Index (SPI) increased by 0.65% week-on-week.
Short-term inflation in Pakistan rose to 11.85% year-on-year in the week ending October 22, driven primarily by wheat flour prices, according to official data from the Pakistan Bureau of Statistics (PBS).
The index, which tracks 51 essential commodities and services across 50 markets in 17 cities, showed that 19 out of 51 items (37.72%) increased in price, while 12 items (23.53%) declined. The SPI, which monitors short-term inflation, increased by 0.65% week-on-week, reflecting price fluctuations in both food and non-food items.
The government has continued to raise petrol and diesel prices on a daily basis, unwilling to ease the petroleum levy. This has fuelled inflationary pressures, indirectly boosting sales tax collections through higher prices of goods and services.
Among the items that increased in price, wheat flour saw a 1% rise, while liquefied petroleum gas (LPG) saw the highest increase at 22.44%. Prices of onions, chicken, and shirting also increased by 4.19%, 12.20%, and 1.86% respectively.
In contrast, the prices of tomatoes fell by 21.99%, followed by petrol (3.63%), banana (2.42%), and diesel (1.68%).
On an annual basis, LPG recorded the highest price increase at 107.12%, followed by onions (72.81%), electricity for Q1 (58.59%), and petrol (44.17%).
The government's decision to raise energy prices has had a significant impact on the cost of living, particularly for households. Higher consumer prices are putting pressure on household budgets.
The SPI increase is a clear indicator of the cost-push inflation, where rising energy costs are followed by increases in food prices. This trend is expected to continue, given the government's stance on energy prices.
The data from PBS shows that short-term inflation has remained in double digits for several consecutive weeks, highlighting the ongoing challenges in stabilizing prices and controlling inflation.
