- PBS releases data for the week ending January 16.
- Tomatoes lead weekly price declines.
- The annual SPI data highlights a complex inflationary situation.
KARACHI: Inflationary pressures in Pakistan further moderated as the Sensitive Price Indicator (SPI) recorded a year-on-year increase of 1.16 per cent for the week ending January 16, the rate the lowest in several months.
On a weekly basis, the SPI fell by 0.39%, reflecting lower prices in major food categories, according to data from the Pakistan Bureau of Statistics (PBS).
Tomatoes led the weekly price decline, plunging 18.31%, followed by potatoes (-10.42%), onions (-10.01%) and eggs (-8.64%). . Other notable declines included chicken (-2.17%), liquefied petroleum gas (-1.21%) and mustard oil (-0.67%).
However, the week was marked by price increases for certain raw materials. Bananas recorded the largest increase, rising 3.22%, while gasoline prices rose 1.39%. Other significant contributors to inflation include vegetable ghee (up 1.08% for 2.5 kg packaging and 0.74% for 1 kg), cooking oil (+1. 01%), firewood (+1.00%) and diesel (+0.99%).
Of the 51 essential items tracked across 17 cities, the prices of 21 items increased, 10 decreased and 20 remained unchanged.
The annual SPI data highlights a complex inflationary picture. Prices of some items have surged over the past year, with women’s sandals topping the list with an increase of 75.09%, followed by potatoes (+47.91%), pulses (+47.91%), +39.77%) and moong legumes (+33.40%). Similarly, the prices of milk powder and beef increased by 25.77% and 22.59% respectively.
Several essential commodities saw significant year-on-year price declines, including onions (-47.22%), wheat flour (-35.89%), and eggs (-31.92%). ). Chilli powder (-20.00%) and tomatoes (-19.83%) also saw considerable declines, providing some relief to consumers.
SPI data revealed varying impacts across income groups. The lowest income households (earning less than Rs 17,732 per month) saw an increase in inflation of 0.20% year-on-year, while the highest income group (earning more than Rs 44,175 per month) experienced a higher increase of 1.66%. .
The slowdown in inflation could influence the monetary policy decisions of the State Bank of Pakistan (SBP) in the coming months. With the SPI showing constant declines, the central bank could consider revising its key rate, currently at 13%, to support economic growth.
According to SBP Governor Jameel Ahmad, inflation is expected to fall further in January but could rise later due to base effects and rising energy prices. He added that inflation is expected to remain within the SBP’s target range of 5-7 per cent.
Forecasts from brokerage firm Arif Habib Limited (AHL) suggest that headline inflation will slow to 3.06% in January, the lowest level in nine years. Consumer price index inflation slowed to 4.1% year-on-year in December, from 4.9% the previous month.