ISLAMABAD: Inflation measured by the Sensitive Price Indicator (SPI) rose sharply during the week that ended on Aug 25, climbing to a record 44.6 per cent year-on-year, the Pakistan Bureau of Statistics data showed on Friday. The index rose mainly because of higher prices of essential food items — mainly tomatoes, onions, pulses and cooking oil — and fuel.

Before this, the highest ever year-on-year increase in the SPI was 42.3pc, recorded for the week ending on Aug 18 and 38.63pc in the week ending on Aug 5.

The latest data showed that the increase in the SPI was 1.83pc on a week-on-week basis. The highest week-on-week increase in the inflation indicator was recorded at 3.68pc for the week that ended on July 28.

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 lead to higher vegetable prices in the coming weeks.

The government has already announced in the budget that it would revive sales tax on petroleum products as well as impose a petroleum development levy in phases. As a result, petrol and diesel prices are expected to increase for the next quarter.

The government projected a modest inflationary annual target of 11.5pc for the ongoing fiscal year. However, the Federal Board of Revenue, which uses inflation as a measure to gather additional tax from consumers, has projected inflation at 12.8pc. Independent economists estimate inflation to remain around 25pc to 30pc.

On Aug 22, the government also revived the national price monitoring committee after four months to keep a check on the prices of essential food items in the country.

The SPI monitors the prices of 51 essential items based on a survey of 50 markets in 17 cities. During the week under review, the prices of 23 out of 51 items increased, seven decreased and 21 remained unchanged.

The highest week-on-week increase was noted in the prices of tomatoes at 43pc, onions at 41pc, potatoes at 6.3pc, eggs at 3.4pc, garlic at 2.2pc, powdered milk at 1.5pc, and mash pulse at 1.12pc.

As for non-food items, the price of cigarettes jumped 2.3pc and LPG 1.95pc.

On a year-on-year basis, the items whose prices jumped the most included tomatoes 178pc, onions 155pc, high-speed diesel 108.8pc, petrol 94.5pc, pulse masoor 90.7pc, cooking oil’s five-litre pack 70.6pc, mustard oil 67.6pc, 2.5kg pack of vegetable ghee 64.7pc, 1kg pack of vegetable ghee 63.9pc, washing soap 63.3pc, electricity 63pc, chicken 55.8pc and gram pulse 55pc.

The SPI increased 2.7pc for the lowest income group (i.e. people earning below Rs17,732 per month) and by 1.53pc for the group with a monthly income above Rs44,175.

Published in Dawn, August 27th, 2022