Inflation approaches 47% in Pakistan

Short-term inflation, based on the Sensitive Price Index (SPI), rose to 46.82 per cent year-on-year for the combined income group for the week ended on April 27, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.

However, on a week-on-week basis, the SPI rose by 0.15 per cent with food items getting costlier, particularly wheat flour and its products, fruits, tomatoes, potatoes, onions, meat and cooking oil.

The rising prices are mostly hitting the salaried class as other segments increase their service and labour charges as well as product prices. The fixed-salaried people, especially those falling in the lower bracket, are the worst hit.

The preceding week, the year-on-year SPI surged to 47.23 per cent on April 20, 46.65 per cent on March 22, 45.5 per cent on Sept 1, 2022 and it stayed above 40 per cent for the first time since Aug 18 last year when the reading was 42.31 per cent.

The SPI is steadily on the rise since the start of Ramadan, followed by further rupee devaluation, costly petrol prices, a hike in sales tax and higher electricity charges. One of the factors for the increase in the price of perishable products is the higher transportation charges.

The only tool the government used so far to tame inflation was a steady increase in the interest rates which has been raised to a record 21 per cent by the State Bank of Pakistan in its last monetary policy review.

Out of 51 items in the SPI basket, prices of 21 items soared while those of seven items decreased. However, the rates of 23 items remained unchanged.

During the week under review, the items whose prices increased the most over the same week a year ago were wheat flour (175.06 per cent), cigarettes (146.44 per cent), potatoes (114.45 per cent), gas charges for Q1 (108.38 per cent), tea Lipton (104.28 per cent), diesel (102.84 per cent), eggs (91.98 per cent), petrol (87.81 per cent), rice basmati broken (87.71 per cent), bananas (86.33 per cent), rice Irri-6/9 (83.39 per cent), pulse moong (67.60 per cent), bread (61.02 per cent), pulse mash (58.10 per cent) and washing soap (49.93 per cent).

On a week-on-week basis, the biggest change was observed in the prices of potatoes (8.22 per cent), chicken (1.75 per cent), wheat flour (1.55 per cent), gur (1.23 per cent), bread (1.13 per cent) and rice Irri-6/9 (1.01 per cent).

Products whose prices saw the highest decline over the previous week were tomatoes (19.20 per cent), bananas (5.39 per cent), onions (1.40 per cent), sugar (1.19 per cent), LPG (1.09 per cent), pulse masoor (0.98 per cent) and mustard oil (0.39 per cent).

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 International Monetary Fund programme to generate revenue for bridging the fiscal deficit, which may result in slow economic growth and higher inflation in coming months.