Tag: Inflation Trends

Tomato and onion price hikes push weekly inflation up

In a significant shift, weekly inflation in Pakistan has increased after seven weeks of consecutive declines.

The Weekly Sensitive Price Indicator (SPI) for the Combined Group saw a 0.11 per cent week-on-week rise for the week ending May 30, 2024.

This comes as a 21.4 per cent year-on-year increase compared to the same period last year, according to the Pakistan Bureau of Statistics (PBS).

The Combined Index stood at 308.52, slightly up from 308.19 the previous week, and significantly higher than the 254.13 recorded a year ago.

Out of the 51 items monitored, prices for 14 items (27.45 per cent) increased, 14 items (27.45 per cent) decreased, and 23 items (45.10 per cent) remained unchanged.

Inflation drivers

Notable price increases during the week were observed in tomatoes (11.25 per cent), onions (3.62 per cent), pulse mash (2.00 per cent), bananas (1.78 per cent), and potatoes (1.23 per cent).

Conversely, significant price decreases were seen in eggs (6.14 per cent), chili powder (5.73 per cent), LPG (5.40 per cent), garlic (4.02 per cent), and rice IRRI (2.93 per cent).

The SPI percentage change by income groups revealed increases across all segments, ranging from 0.08 per cent to 0.15 per cent. The lowest income group experienced a 0.09 per cent rise, while the highest income group saw a 0.08 per cent increase.

On an annual basis, SPI changes showed increases between 14.68 per cent and 24.67 per cent across different income segments, with the lowest income group seeing a 14.68 per cent rise and the highest income group a 19.24 per cent increase.

The average price of Sona urea was recorded at Rs4,796 per 50 kg bag, reflecting a 0.16 per cent decrease from the previous week but a 55.19 per cent increase from last year.

Meanwhile, the average price of cement rose to Rs1,237 per 50 kg bag, up 0.30 per cent from the previous week and 9.80 per cent higher than the previous year.

May 31, 2024
Cost of living rises in Pakistan: Weekly inflation jumps by 0.81%

In a recent report by the Pakistan Bureau of Statistics (PBS), the Weekly Sensitive Price Indicator (SPI) for the Combined Group witnessed a marginal increase of 0.81 per cent Week on Week (WoW), concluding on January 04, 2024.

The SPI also exhibited a substantial 42.86 per cent Year on Year (YoY) surge when compared to the corresponding period from the previous year.

The Combined Index, reflecting the overall price movement, stood at 313.66 as of January 04, 2024, compared to 311.14 on December 28, 2023. In contrast, a year ago on January 05, 2023, the index was reported at 219.56.

Out of the 51 items considered, the average prices of 19 items experienced an increase, 09 items observed a decrease, and 23 items remained stable throughout the week.

During this period, notable price hikes were observed in tomatoes (16.04 per cent), chicken (13.98 per cent), eggs (3.20 per cent), onions (3.04 per cent), and bananas (2.13 per cent).

Moreover, significant decreases were noted in the prices of potatoes (8.68 per cent), tea Lipton (1.29 per cent), garlic (0.68 per cent), and cooking oil 5 litre & vegetable ghee 2.5 kg (0.54 per cent) each.

Analysing the weekly SPI percentage change across income groups revealed a universal increase ranging from 0.79 per cent to 0.84 per cent. The Lowest Income Group experienced a rise of 0.81 per cent, while the highest income group recorded a slightly lower increase of 0.8 per cent.

On a yearly basis, the SPI change across different income segments exhibited a general increase ranging from 35.33 per cent to 46.38 per cent. The Lowest Income Group saw a yearly rise of 35.33 per cent, while the highest income group recorded an increase of 41.35 per cent.

Noteworthy price points in the market included Sona urea, with an average price of Rs4,618 per 50 kg bag, marking a 0.02 per cent increase from the previous week and a substantial 72.45 per cent surge compared to the previous year.

In contrast, the average Cement price recorded at Rs1,226 per 50 kg bag showed a 0.47 per cent decrease from the previous week but stood 17.43 per cent higher than prices observed last year.

These fluctuations in the SPI underscore the dynamic nature of the market, reflecting both short-term variations and longer-term economic trends.

As consumers and businesses navigate these changes, analysts are closely monitoring the SPI for insights into broader economic patterns.

January 6, 2024
State Bank maintains interest rate at 22% as inflation takes a breather

The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has announced its decision to maintain the key policy rate at 22 per cent, as outlined in their official statement released today.

The decision to uphold the policy rate at 22 per cent was reached after careful consideration by the MPC, which took into account various economic factors. One of the pivotal factors influencing this decision was the recent trend in inflation.

1/4 زری پالیسی کمیٹی (ایم پی سی) نے آج کے اجلاس میں پالیسی ریٹ کو 22 فیصد پر برقرار رکھنے کا فیصلہ کیا۔https://t.co/RxsBLHPKLm #SBPMonetaryPolicy pic.twitter.com/jS5EMyPoka

— SBP (@StateBank_Pak) September 14, 2023

In particular, the MPC noted a significant decline in inflation from its peak of 38 per cent in May to 27.4 per cent in August 2023. This trend, coupled with the expectation of a continued downward trajectory in inflation, was a key factor in maintaining the current policy rate.

Despite recent increases in global oil prices, which have been passed on to consumers through adjustments in administered energy prices, the MPC remains confident in the outlook for inflation, particularly in the latter half of the year. This optimism is based on several factors, including the positive territory of real interest rates on a forward-looking basis.

Additionally, the expected alleviation of supply constraints due to improved agricultural output and recent administrative measures against speculative activities in the foreign exchange and commodity markets are anticipated to support a favorable inflation outlook.

The MPC also highlighted four noteworthy developments that have occurred since its last meeting in July:

1. Improved Agricultural Outlook: The latest data on cotton arrivals, improved input conditions, and satellite data indicating healthy vegetation for other crops have contributed to an improved outlook for agriculture.

2. Rising Global Oil Prices: Global oil prices have experienced an upward trajectory and are currently hovering around the $90/barrel level.

3. Current Account Deficit: As expected, the current account shifted from surplus to deficit in July, partly attributed to the recent relaxation of import restrictions.

4. Positive Regulatory Measures: Recent administrative and regulatory actions aimed at enhancing the availability of essential food commodities and curbing illegal activities in the foreign exchange market have started to yield positive results, narrowing the gap between interbank and open market exchange rates.

The SBP’s MPC affirmed its commitment to closely monitoring risks to the inflation outlook and expressed its readiness to take appropriate actions when necessary to achieve the objective of price stability.

Furthermore, the MPC highlighted the importance of maintaining a prudent fiscal stance to manage aggregate demand effectively. This fiscal responsibility is seen as crucial to achieving the medium-term target of 5-7 per cent inflation by the end of the fiscal year 2025.

September 14, 2023