Irfan Ahmed

The Sensitive Price Indicator (SPI) based on inflation for the week ending September 29 witnessed an increase of 30.62% for the combined consumption group compared to the corresponding week of the last year (September 30, 2021).      

According to economic experts, it was expected to have peaked inflation in the outgoing quarter of FY23 and was likely to come down with a high base effect kicking in. 

As per the State Bank of Pakistan (SBP), average inflation for the first quarter of the fiscal year 2023 (1QFY23) clocks in at 25.84% compared to 8.58% in 1QFY22 and on average will be 18-20% in FY23. In addition, the SBP kept the benchmark policy rate unchanged at 15% to counter inflation, WealthPK reported.  \

According to the Pakistan Bureau of Statistics (PBS), an increase was observed in the prices of food items including Tomatoes (224.20%), Onions (139.03%), Pulse Gram (74.56%), Pulse Masoor (72.42%), Mustard Oil (64.53%), Cooking Oil 5 litre (61.78%), Vegetable Ghee 2.5 kg (58.37%), Pulse Mash (57.36%), Vegetable Ghee 1 kg (55.89%), Pulse Moong (47.96%), and non-food items including Diesel (105.12%), Petrol (91.87%), Washing Soap (63.33%), and Gents Sponge Chappal (52.21%).

According to the PBS, the combined index increased to 205.13 points on September 29, 2022, compared to 203.21 points on September 22, 2022, while the index was recorded at 157.04 points on September 30, 2021.        

During the week, out of 51 items, prices of 20 (39.22%) items increased, 10 (19.61%) items decreased and 21 (41.17%) items remained stable.

Onions were one of the key commodities that increased the weekly inflation, with prices increasing 47.77% on a Week-on-Week basis.     

Meanwhile, compared to the previous week, the SPI for the combined consumption group in the week under review witnessed a slight increase of 0.94%.

Food commodities that saw an increase in prices included Tomatoes (30.29%), Tea Lipton (2.50%), Bread (1.74%), and non-food item, Washing Soap (1.13%).

On the other hand, a decrease was observed in the prices of LPG (4.14%), Wheat Flour (2.99%), Pulse Masoor (1.59%), Bananas (1.50%), Cooking Oil 5 litre (1.12%), Sugar (0.60%), Garlic (0.22%), Vegetable Ghee 2.5Kg (0.17%) and Vegetable Ghee 1 kg & Potatoes (0.13%) each. 

Alternatively, the prices of 21 items remained stable including Beef with Bone (Average Quality), Pulse Mash (Washed), Salt Powdered (NATIONAL/SHAN) 800 gm, Chillie Powder NATIONAL 200 gm Packet, Cooked Beef at Average Hotel, Cooked Daal at Average Hotel, Tea Prepared Ordinary, Long Cloth 57" Gul Ahmed/Al Karam, Shirting (Average Quality), Lawn Printed Gul Ahmed/Al Karam, Georgette (Average Quality), Gents Sandal Bata, Gents Sponge Chappal Bata, Ladies Sandal Bata Pair, Electricity, Gas Charges up to 3.3719 Metric Million British Thermal Unit (MMBTU), Petrol Super, Hi-Speed Diesel, and Telephone Call Charges.   

The SPI for the lowest consumption group up to Rs17,732 observed an increase of 1.55% and went up to 209.18 points this week from 205.98 points last week. On a yearly basis, analysis of SPI change across different income segments showed that SPI increased across all quintiles ranging between 24.16% and 37.09%. 

Yearly inflation for the group with monthly income from Rs29,518 to Rs44,175 (Q4) increased by 31.40%, while the highest income group with monthly income above Rs44,175 recorded an increase of 37.09%.

In the meantime, weekly inflation for the group with monthly income from Rs22,889 to 29,517 (Q3) was increased by 1.16%.     

In addition, there was a mild price difference between the prices of Utility Stores and the open market (September 29, 2022). The Utility Stores’ prices were comparatively lesser than the open market. The Utility Stores Corporation gave a special subsidy to consumers on pluses, flour, sugar, rice, and ghee under the government’s relief package.   

The government had reduced the prices of Utility Stores’ commodities on a variety of items, including flour 20kg by Rs772.77, tota basmati rice by Rs9.05 per kg, Daal Masoor by Rs4.45 per kg, chana by Rs13.31 per kg, sugar by Rs17.11 per kg, ghee Manpasand by Rs144.38 per kg, and ghee Handi by Rs113.78 per kg.

In a nutshell, structural reforms were the only way to move the economy into a sustainable growth path, reduce poverty, reduce inflation, and provide social support.

Credit : Independent News Pakistan-WealthPk