Pakistan: Inflation touches 29.8 % amid rise in food, energy prices

Published on: 05 Aug 2023 at 04:11 PM

Published by: The fact news

Karachi, August 5

A series of sharp rises in energy and food prices in Pakistan, pushed its weekly inflation up by 1.30 percent and annualised inflation up to 29.83 percent, Geo News reported on Saturday citing The News.

According to the Pakistan Bureau of Statistics (PBS), the increase in the sensitive price indicator (SPI) was attributed to an increase in the prices of tomatoes (16.85 percent), LPG (9.82 percent), petrol (7.86 percent) and diesel (7.82 percent), chilli powder (7.58 percent), garlic (5.71 percent), onion (5.50 percent), powdered milk (5.17 per cent), eggs (3.86 per cent) and broken basmati rice (2.06 percent).

On the other hand, a major decrease was observed in the prices of mustard oil (1.63 percent), chicken (1.40 percent), vegetable ghee 1kg (0.51 percent), vegetable ghee 2.5kg (0.36 percent), pulse gram (0.22 per cent), wheat flour (0.20 per cent) and pulse moong (0.03 per cent).

For the week under review, SPI was recorded at 271.56 points against 268.08 points registered last week and 209.17 points recorded during the week ending August 8, 2022.PBS compiles SPI by collecting prices of 51 essential items from 50 markets in 17 cities of the country.

During the week, out of 51 items, prices of 23 (45.10%) items increased, 7 (13.72%) items decreased and prices of 21 (41.18%) items remained unchanged, Geo News reported.

Notably, different weights are assigned to various commodities in the SPI basket.

Commodities with the highest weights for the lowest quintile include milk (17.5449 percent), electricity (8.3627 percent), wheat flour (6.1372 percent), sugar (5.1148 percent), firewood (5.0183 per cent), long cloth (4.2221 percent), and vegetable ghee (3.2833 percent).

Out of these commodities, the price of milk, sugar, and firewood went up; wheat flour and vegetable ghee decreased; whereas prices of long cloth, and electricity remained unchanged, Geo News reported.

Sakina, a homemaker from North Nazimabad said that she does not know how to cater to the food needs of her children, particularly meat.

“Chicken is PKR 600/kg at my local shop, beef is more than Rs1,100 and mutton — I have not even bothered checking its price,” she lamented, adding that just 250 grams of tomatoes cost 50 PKR, which means straight up PKR 200/kg.

“With growing kids, running the kitchen in a single and meagre salary has become close to impossible,” Geo News quoted the homemaker.

The year-on-year (YoY) trend depicts an increase of 29.83 percent, on account of rising prices of wheat flour (131.40%), cigarettes (109.57 percent), gas charges for Q1 (108.38 percent), tea (97.71 percent), broken basmati rice (82.86 percent), rice irri-6/9 (73.73 percent), tomatoes (67.54 percent), chilli powder (66.74 percent), sugar (64.12 percent), chicken (60.51 percent), gents sponge chappal (58.05 per cent), gur (57.75 percent), and potatoes (55.75 percent), according to Geo News.

Commodities that registered a YoY decline in prices included onions (37.10 percent), electricity for Q1 (18.06 percent), pulse masoor (15.07 percent), and vegetable ghee 1 kg (1.13 percent).

A working woman, wishing to remain anonymous, said that her father had taken a bank loan.

“Since the interest rates have been increased by the central bank, paying the instalment takes up a major chunk of our combined income,” she said, sharing that for a day this week her family had no wheat flour at home to make roti.

“We used to be a regular middle-class family, but I feel we are now poor,” she said. Notably, Pakistan is battling a huge economic crisis, with staggering inflation and depleting Forex reserves.

Weeks before, IMF approved a USD 3 billion bailout to support Pakistan in avoiding a default on its debt repayments.

With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan has been facing its worst economic crisis in decades, which analysts say could have spiralled into a debt default in the absence of the IMF deal.