KARACHI:
Pakistan’s weekly inflation reading, measured through the Sensitive Price Indicator (SPI), increased 0.38% owing to a hike in food prices in the week ended December 19, 2024.
According to the Pakistan Bureau of Statistics’ (PBS) latest data, the uptick in inflation marked the second consecutive week of increase, following last week’s reading of 0.07%.
The short-term inflation exhibited a rise of 4.64% when compared with the corresponding week of last year.
Consumers were bearing an increasing pressure of price surge as grocery items continued to become expensive in the week under review. The uptick in weekly inflation came a few days after the State Bank of Pakistan announced a reduction of 200 basis points in its key policy rate to 13%.
“The numbers released by the PBS show a mixed trend in prices of commodities such as tomato, onion, potato and pulses. Based on weekly readings, we anticipate a 4.1% year-on-year (YoY) monthly inflation rate for December. The important thing is that we are expecting a decline in food inflation,” Arif Habib Limited (AHL) Head of Research Sana Tawfiq said.
In addition, a month-on-month decline was expected in the housing index along with a flat electricity rate owing to monthly fuel charges adjustment, she added.
Inflation surged due to energy/gas price adjustments from November 2023 to March 2024, resulting in a sharp increase in the Consumer Price Index (CPI). As price increase slowed afterwards, the YoY inflation dropped significantly in November and was expected to stay low until March next year, when the high base effect will peter out,” Optimus Capital Research Head Maaz Azam commented.
“Headline inflation is easing due to soft commodity prices, a favourable base effect and subdued demand. Inflation for December is projected at around 4.2% YoY and is expected to remain below 4% over the next three months before rebounding to high single digits due to the base effect,” he noted.
SPI comprises 51 essential items whose price data is collected from 50 markets across 17 cities in the country.
According to the PBS, the commodities that recorded an increase in prices included tomatoes (56.66%), firewood (1.57%), garlic (1.40%), 2.5kg vegetable ghee pack (0.95%), five-litre cooking oil pack (0.79%), mustard oil (0.74%), LPG (0.71%), gur (0.28%), one-kg vegetable ghee (0.25%), sugar (0.23%), georgette (0.13%) and long cloth (0.10%).
On the other hand, there was a decrease in prices of onions (4.16%), potatoes (3.83%), eggs (2.72%), diesel (1.17%), gram pulse (0.98%), wheat flour (0.76%), bananas (0.56%), broken Basmati rice and moong pulse (0.27% each)
