ISLAMABAD: The weekly inflation dropped slightly and posted an increase of 42.70 per cent largely driven by essential kitchen items and high energy costs, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

The weekly inflation measured by the Sensitive Price Indicator (SPI) posted a slight decline of 0.58pc on a week-on-week basis that ended on September 8, the PBS data said.

Before this, the highest ever year-on-year increase in the SPI was 45.50pc recorded for the week ending on September 1 and 44.58pc, recorded for the week ending on August 25, and 42.31pc in the week ending on August 18.

The latest data shows that the SPI dipped slightly on a week-on-week basis, mainly because of a major drop in food prices—tomatoes and onions, on account of imports from Afghanistan and Iran. The week ending July 28 saw the highest week-on-week increase in inflation, at 3.68pc.

Soaring vegetable prices due to damage to standing crops and a massive hike in electricity rates have also contributed to higher prices. The damage to standing crops will push up the prices of vegetables in the coming weeks.

Meanwhile, the government has exempted duty and taxes on the import of tomatoes and onions. The duty and tax relief per kg will be nearly Rs10, while the impact on the tomatoes will be negligible. However, the import of these products will accelerate further in the coming days.

The government has projected a modest inflationary annual target of 11.5pc for the ongoing fiscal year. However, the Federal Board of Revenue (FBR), which uses inflation as one of its measures to collect additional taxes from consumers, forecasts inflation at 12.8pc. Independent economists estimate inflation to remain around 25pc to 30pc.

The International Monetary Fund said in its country’s staff report that the average Consumer Price Index (CPI) inflation was expected to surge to 20pc in the current financial year, while core inflation would also remain elevated due to higher energy prices and the rupee’s decline.

The SPI monitors the prices of 51 essential items based on a survey of 50 markets in 17 cities across the country. During the week under review, the prices of 26 out of 51 items increased, nine decreased, and 16 remained stable.

An increase was observed in the prices of LPG (10.66pc), wheat flour (4.15pc), eggs (3.96pc), bread (3.27pc), pulse moong (2.74pc), curd (2.72pc), tea Lipton (2.50pc), pulse gram (1.65pc), chicken (1.58pc), milk fresh (1.57pc), fire wood (1.54pc) and potatoes (1.02pc).

On a year-on-year basis, the items whose prices jumped the most included tomatoes (144.25pc), diesel (114.08pc), petrol (98.73pc), pulse masoor (76.34pc), cooking oil 5 litre (67.99pc), mustard oil (66.53pc), LPG (64.98pc), washing soap (64.50pc), electricity (63.03pc), vegetable ghee 2.5 Kg (62.53pc), pulse gram (61.02pc), onions (59.97pc) and vegetable ghee 1 kg (58.19pc).

Published in Dawn, September 10th, 2022