The official data for weekly inflation in Pakistan has hit a record high of 48.35% year-on-year (YoY) for the week ending May 4, 2023. This sharp increase in inflation is primarily due to a rise in the prices of essential food items such as chicken and wheat flour.
The sensitive price indicator (SPI), which tracks price changes in a select group of essential commodities, increased by 1.05% week-on-week.
The Pakistan Bureau of Statistics (PBS) attributes this spike to price increases in chicken (8.91%), potatoes (3.99%), powdered milk (3.81%), pulse gram (1.96%), pulse masoor (1.83%), eggs (1.81%), mutton (1.71%), pulse mash (1.58%), cooked daal (1.36%), and bread (1.13%). Non-food items such as gents’ sponge chappal (58.05%), gents’ sandal (33.36%), ladies’ sandal (14.31%), and washing soap (1.27%) also saw price hikes.
However, prices of some items like onions (16.69%), garlic (3.44%), tomatoes (3.44%), petroleum (1.70%), mustard oil (0.99%), LPG (0.96%), cooking oil 5 liters (0.40%), and vegetable ghee 2.5kg and 1kg (0.10%) each decreased significantly.
The SPI’s increase is mainly due to rising chicken and wheat flour prices. Wheat flour prices have soared due to shortages experienced by flour mills resulting from the government’s insufficient supply. In contrast, chicken prices have risen due to the increased cost of day-old chicks.
The May 2023 CPI (consumer price index) will reach around 38%, compared to 36.4% in April 2023. The PBS compiles the SPI by collecting prices of 51 essential commodities from 50 markets across 17 cities in Pakistan. During the week under review, 30 products (58.82%) saw price increases, while 9 items (17.65%) experienced price decreases, and 12 items (23.53%) remained unchanged.
The YoY rise in SPI is attributed to a significant jump in the prices of wheat flour (177.61%), cigarettes (146.44%), potatoes (123.00%), gas charges for Q1 (108.38%), tea (104.28%), gents sponge chappal (100.33%), diesel (99.39%), eggs (95.45%), broken basmati rice (89.31%), bananas (87.86%), petrol (87.81%), rice irri-6/9 (84.43%), pulse moong (68.44%), bread (62.83%), and pulse mash (60.59%).
In contrast, prices of tomatoes (50.09%), scallions (10.03%), and chili powder (6.4%) have decreased. As a result, for various income groups, the YoY SPI increased by 44.47%, 47.90%, 47.90%, 48.15%, and 49.75%, respectively.
