ISLAMABAD: The short-term inflation, based on the Sensitive Price Index (SPI), eased slightly further year-on-year but remained significantly high at 45.49 per cent for the week ending on May 25, showed the official data released on Friday.

Despite a decrease in petroleum prices, the short-term inflation remained above 45pc for the past two weeks. It reached an all-time high at 48.35pc for the week ending on May 4 and slightly dropped to 48.02pc in the subsequent week. However, on a week-on-week basis, it posted a drop of 0.42pc.

Since the beginning of Ramazan, the SPI has been on an upward trajectory due to several factors. The depreciation of the rupee, rising petrol prices, an increase in sales tax, and higher electricity bills are among the key contributors to this inflationary trend.

Of the 51 items in the SPI basket, prices of 18 goods soared, 16 dropped and 17 remained unchanged compared to the previous week.

During the week under review, the items whose prices increased the most over the same week a year ago were: cigarettes (138.50pc), tea Lipton (114.93pc), wheat flour (110.17pc), gas charges for Q1 (108.38pc), gents sponge chappal (100.33pc), bananas (99.58pc), potatoes (98.10pc), rice basmati broken (81.24pc), rice irri-6/9 (79.96pc), petrol (79.85pc), diesel (78.68pc), eggs (69.55pc), pulse moong (63.18pc), bread (63.17pc) and pulse mash (55.93pc),

On a week-on-week basis, the biggest rise was observed in the prices of energy saver (4.91pc), long cloth (2.75pc), rice basmati broken (1.86pc), cooked beef (1.32pc), mutton (1.22pc), milk fresh (1.20pc), shirting (1.14pc) and beef (1.03pc).

Meanwhile, a decrease was also observed on a week-on-week basis in prices of chicken (8.91pc), wheat flour (3.33pc), eggs (3.03pc), garlic (2.83pc), tomatoes (2.61pc), onions (2.22pc), bananas (2.04pc), pulse moong (1.51pc), pulse masoor (1.26pc), cooking oil 5 litre (1.01pc) and LPG (3.44pc).

According to a finance ministry report, the lower-income segment of society is already feeling the brunt of high inflation, which has become unrelenting on the back of political instability, financial mismanagement and delay in an agreement with the International Monetary Fund.

On the other hand, the State Bank of Pakistan was enacting a contractionary monetary policy, “but inflationary expectations are not settling down”, the report noted.

The government has been taking harsh measures — hikes in fuel and power tariffs, withdrawal of subsid­ies, market-based excha­nge rate and higher taxation — under the IMF programme to generate revenue for bri­d­ging the fiscal deficit, which may result in slow economic growth and hig­her inflation in coming months.

Published in Dawn, May 27th, 2023