ISLAMABAD: Consumer prices rose significantly in the outgoing week on the back of onions, chicken, eggs, rice, cigarettes and fuel, official data showed on Friday, driving the weekly inflation to over 40 per cent for the first time in over five months.

Though week-on-week inflation eased slightly, it still remained high as bananas, chicken, sugar, cooking oil, gas and cigarettes became costlier, the Pakistan Bureau of Statistics (PBS) reported.

As a result, short-term inflation, measured by Sensitive Price Indicator (SPI), jumped to 41.54 per cent on a year-on-year basis for the week ended on Feb 23, rising from 38.42pc in the previous week.

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The hike in prices is the highest annual rise since the week ending Sept 8, 2022, when the SPI inflation was 42.7pc. And it was above 40pc for the first time since Sept 15, when the reading was 40.58pc.

Prices of onions, chicken, eggs, cigarettes and fuel see highest increase

The week-on-week inflation eased to 2.78pc from 2.89pc a week ago. Of the 51 items tracked, the prices of 33 items increased, six items decreased, whereas those of 12 items remained stable.

The previous week-on-week reading of 2.89pc reading was the highest since Oct 27, when the change in SPI was 4.13pc, official data showed.

During the week under review, the items whose prices increased the most compared to the same week a year ago were onions 372pc, cigarettes 164.7pc, gas 108.38pc, chicken 85.7pc, diesel 81.36pc, eggs 75.81pc, Irri 6/9 rice 75.41pc, broken basmati rice 74.16pc, bananas 72.22pc, washed moong pulse 70.39pc, and petrol 69.87pc.

In contrast, the highest year-on-year fall was recorded in the prices of tomatoes -67.93pc, chilli powder -7.42pc, and electricity charges for the lowest-income group (-6.64pc).

On a week-on-week basis, the biggest change was noted in the prices of gas 108.4pc (for the lowest-income group), cigarettes 76.45pc, bananas 6.67pc, chicken 5.27pc, sugar 3.37pc, cooking oil five-litre tin 3.07pc, vegetable ghee 2.5kg pack 2.79pc, vegetable ghee 1kg pack 2.2pc, and prepared tea 1.09pc.

The products whose prices saw the highest decline compared to the previous week were onions -13.84pc, eggs -5.5pc, tomatoes -4.23pc, garlic -3.03pc, LPG -0.81pc, and gram pulse -0.21pc.

Meanwhile, the headline inflation measured by the Consumer Price Index (CPI) was recorded at 27.6pc in January. However, the government has been taking strict measures under IMF conditions that are likely to further cool the economy and stoke inflation.

The government has already taken a string of measures, including adopting a market-based exchange rate; a hike in fuel and power tariffs; the withdrawal of subsidies, and more taxation to generate revenue to bridge the fiscal deficit.

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Officials say the lender is still negotiating with Islamabad over power sector debt, as well as a potential rise in the policy rate, which currently stands at 17pc.

The country’s economy has been in turmoil and desperately needs external financing, with its foreign exchange reserves dipping to around $3 billion, barely enough for three weeks’ worth of imports.

China this week announced refinancing of $700 million, which was received by the State Bank of Pakistan on Friday.

Published in Dawn, February 25th, 2023