ISLAMABAD: Short-term inflation measured by the Sensitive Price Index (SPI) was recorded at 0.53 per cent week-on-week and 30.6pc year-on-year for the period ending Nov 3, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

It was a sharp respite from last week, when the week-on-week change was record 4.13pc and the second biggest jump of 3.68pc for the Sept 22 week.

The annual increase in SPI has been on the decline for some time, falling from a peak of 45.5pc in the week ending Sept 1. Other notable mentions: 44.6pc (Aug 25), 42.7pc (Sept 8), 42.3pc (Aug 18). Prices rose at such a fast pace recently on the back of surging food and fuel prices.

A World Bank report estimated that the average Consumer Price Index (CPI)-based inflation in Pakistan would rise to 23pc in the current fiscal year from 12.2pc a year ago due to higher domestic energy prices, flood disruptions and a weaker rupee. Almost similar projections were made by the State Bank of Pakistan as well as the International Monetary Fund in their recent reports.

The annual CPI inflation surged 26.6pc in October after it slowed to 23.2pc in September from a 49-year high of 27.3pc in August as the country continued to be in the grip of high food and transport prices.

The SBP has been tightening its monetary policy to contain surging inflation and the rupee’s rapid depreciation. Since September 2021, the central bank has increased the policy rate by a cumulative 800bps to 15pc, the highest rate since the 2008 global financial crisis.

Soaring vegetable prices especially onions and tomatoes due to damage to the standing crops and a massive hike in electricity rates have also contributed to pushing up inflation.

The IMF said in its country’s staff report that the average 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 PMLN-led coalition government has projected a modest inflationary annual target of 11.5pc for the ongoing fiscal year. The government revived the National Price Monitoring Committee headed by Planning Minister Ahsan Iqbal who so far convened only one meeting after its revival, clearly showing the government’s seriousness.

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 21 out of 51 items increased, 9 decreased, and 21 remained stable.

In the food group, the items that saw the highest week-on-week increase in prices include tomatoes (15.97pc), onions (9.38pc), bananas (3.77pc), potatoes (2.88pc) and salt powdered (2.58pc).

In the non-food group, on a week-on-week basis, the matchbox price increased by 1.34pc.

On a year-on-year basis, the items whose prices jumped the most included onions (213.16pc), tomatoes (79.14pc), diesel (74.51pc), petrol (62.75pc), pulse gram (62.52pc), pulse moong (55.40pc), cooking oil 5 litre (54.36pc), gents sponge chappal (52.21pc), washing soap (51.91pc), vegetable ghee 2.5 kg (51.78pc), bananas (50.23pc), pulse mash (49.25pc), pulse masoor (47.73pc) and mustard oil (45.53pc).

Published in Dawn, November 5th, 2022