Short -term inflation drops 0.15%

Karachi:

The Sensitive Price Index (SPI) for the week ended on March 27, 2025, recorded a 0.15% reduction of the week (WOW) and a 1.26% decrease on an annual basis (WOW).

The SPI, which is calculated on a weekly basis to monitor the movements of basic goods in a short period of time, allows timely review of the country’s inflationary status. It covers the basics of index 51, with data collected from 50 markets in 17 cities.

For the week ending March 27, the Spi recorded a slight decrease of 0.15%. The most significant price reductions were observed in the onions (4.68%), bananas (4.27%), eggs (3.87%), garlic (2.23%), potatoes (1.47%), chicken (1.29%), sugar (0.94%) and Gram (0.67%).

On the contrary, there were increases in tomatoes (9.62%), LPG (1.17%), printed fabrics (0.62%), pulse pulp (0.56%), GUR (0.51%), beef (0.30%), long fabric (0.29%), pulse (0.20%).

Among the 51 figures attended, 10 figures (19.61%) increased, 10 figures (19.61%) decreased while 31 figures (60.78%) remained stable.

On the basis of Yoy, the Spi showed a total decrease of 1.26%. Remarkable price reductions were recorded for onions (68.64%), wheat flour (33.33%), chili powder (20%), Q1 electricity (18.92%), Lipton tea (16.98%) (9.37%), gasoline (8.55%) and LPG (1,82%).

On the contrary, significant increases in prices on ladies’ sandals (75.09%), Moong (27.22%) pulse, powder milk (25.75%), beef (21.37%), sugar (18.12%) (12.97%), cooked DAAL (12.77%), Shirting (11.57%) and DAAL (12.77%) and DAAL (12.77%), Georgette Fabric (11.20%).

Overall, inflation for March 2025 is up 0.6%, down 20.7% in the same period last year, according to ISMA IQBal Securities. This shows significant relief in price pressure.

In one month to month (MOM), inflation is expected to rise by 0.86%, after a decrease of 0.83%in February 2025. As a result, total food inflation is expected to increase by 1.4%.

Inflation of the core is expected to facilitate 9.1% from 15.7% last year, with an urban core inflation at 8.4% and the inflation of the rural core at 10.1%. The sharp decline is attributed to a high basic effect and improved price stability.

However, the inflation of the rural core remains relatively high due to persistent challenges, such as the inefficiency of the supply chain and the highest transport costs.

Pakistan’s state bank (SBP) has maintained its policy interest rate unchanged at 12%, by cutting 1,000 base cuts (BPS) to evaluate its impact on inflation and macroeconomic stability. The Monetary Policy Committee underlined the risks of increased inflation of the core and possible increases in food and energy prices. In addition, the government has increased the oil growth contribution by RS10 per liter.

The International Monetary Fund has underlined the need for continuous monetary tightening, stating that the complete impact of recent interest rate cuts has not yet been implemented.