(CTN News) – The Sensitive Price Indicator (SPI), which measures Pakistan’s weekly inflation, has reached a multi-year high at 9.95% for the week ending November 16, 2023. The Pakistan Bureau of Statistics (PBS) reported on Friday that the surge is mainly due to a significant increase in gas prices that took effect at the beginning of the month.
During the week ending November 8, inflation was at 0.73%, highlighting the abrupt spike within a short period. According to PBS, the gas price increase alone contributed 480% to the weekly inflation reading.
According to the Express Tribune, Optimus Capital Management analyst Maaz Azam expressed surprise at the impact of the gas price hike, stating that it exceeded market expectations.
Based on Azam’s analysis, it appears that PBS also included fixed costs, such as meter rent, in the weekly inflation calculation.
According to the new projection (of his research house), the average monthly inflation reading for the current fiscal year 2023-24 will rise 1.6 percentage points to 25% from 23.5% previously.
Azam noted that the weekly inflation rate of 9.95% is notably high, not seen for at least the past four and a half years.
Without the impact of the gas price increase, the overall reading decreased. State Bank of Pakistan (SBP) expressed concern about the rise in gas prices, anticipating impacts on inflation in the future.
According to the SBP, however, inflation for FY24 will likely be in the range of 20-22%, due to a likely drop in other commodities that will offset the impact. Monthly readings, measured by the consumer price index (CPI), are projected to remain high during the current first half (Jul-Dec) of FY24, but will rapidly decline during the second half (Jan-Jun).
According to PBS, items such as Lipton tea, masoor pulse, chicken, garlic, powdered salt, wheat flour, prepared tea, LPG, potatoes, and shirting material contributed to the weekly inflation increase.
During the week, 25 items had price increases, 13 had price decreases, and 13 had prices remain the same. Comparing the same week last year to the same week this year, inflation readings increased by 41.90%. Gas charges for Q1 surged by 1,108.59% compared to the same week last year.
Other commodities, such as cigarettes, wheat flour, chili powder, rice basmati has broken, garlic, rice irri-6/9, gents sponge chappal, tea Lipton, gents sandal, gur, sugar, and salt powder, also saw annual increases ranging from 46.5 % to 82%.