Pakistan’s weekly inflation, as per the Sensitive Price Indicator (SPI), was a significant 29.65% hike during the week ending on October 26, 2023, compared to the same period in the previous year. This spike has been attributed mainly to soaring energy prices and escalated costs of staple food items.
The Pakistan Bureau of Statistics (PBS) highlighted that this inflationary trend was spurred by a staggering 108.38% rise in gas prices in the first quarter of the financial year 2023-24. A 94.46% escalation closely followed this in the costs of cigarettes. Essential kitchen staples weren’t spared either, with dramatic price increases observed across products: chilli powder by 84.11%, broken Basmati rice by 78.51%, and a notable rise in the costs of wheat flour, sugar, rice varieties, sponge chappals, jaggery, and powdered salt.
Export Policies vs Domestic Price Stability
Despite robust harvests leading to surplus production levels of wheat, rice, and sugar, Pakistani consumers have been grappling with relentless price increases for these crucial commodities. The current agricultural abundance has reduced the necessity for wheat imports, and the nation is positioned to export substantial rice quantities and potentially some sugar in the ensuing months.
Nevertheless, this surplus has paradoxically failed to stabilize or reduce prices within domestic markets. This discrepancy has raised serious concerns regarding the efficacy of the government’s strategies to control pricing and its policies that currently favour exports. Many are left wondering if these measures are at the expense of local consumers’ economic burdens.
The situation seems poised for further strain as experts forecast high inflation levels. These projections come in the wake of an anticipated gas price hike of up to 193% starting November 1, 2023. Such an increase is expected to burden various industrial and commercial sectors heavily, subsequently trickling down to affect end consumers as businesses offset rising operational costs by hiking product prices.
Industries such as steel, cement, and fertiliser manufacturing are in the spotlight, expected to undergo substantial product price revisions. This adjustment will likely make crop production inputs and construction materials even pricier, adding to the near-future economic pressures facing businesses and everyday consumers.
In contrast to the grim overall inflationary picture, PBS did offer a sliver of positive news. There was a marginal 0.33% reduction in weekly inflation compared to the immediate preceding week. This slight dip was attributed to decreased prices of several items, including chicken, onion, certain rice varieties, banana, jaggery, pulses, sugar, and mustard oil, which saw price drops ranging from 2% to 10.19% on a week-on-week basis.
