In the past week ending November 8, 2023, the Sensitive Price Index (SPI) surged to a seven-week high, registering 0.73% weekly inflation. This increase was attributed to a marked rise in food prices, as reported by the Pakistan Bureau of Statistics (PBS).
Tomatoes saw the biggest rise, rising 15.43% during this period, followed by a 4.47% rise in potato prices. Other significant increases were in wheat flour prices at 2.36%, garlic at 2.16%, salt powder at 1.82%, chicken at 1.60%, Lipton tea at 0.96%, georgette at 0.95%, bananas at 0.94% and shirt. 0.58%.
Of the 51 items, 39.22% saw a price increase, while 15.69% showed a decrease and 45.09% remained unchanged during the week.
Arif Habib Limited highlighted that the SPI reading increased by 0.73% in the week under review, marking the highest increase since September 21, 2023. Year-on-year comparisons depict a staggering 29.86% increase in inflation rates from same week of the previous year.
In annual comparisons, energy and food prices showed increases ranging from 50% to a significant 108.50%. These increases included items such as gas charges for Q1, cigarettes, chili powder, wheat flour, various types of rice and garlic.
Financial markets expect persistently high inflation in November due to historical gaps in price increases, which may affect December 2023 due to the low base effect.
The State Bank of Pakistan (SBP) has acknowledged that the rise in natural gas prices could cause inflation to be under control, but remains confident that these increases may be offset by a slowdown in other components. As a result, the central bank maintained its forecast for average monthly inflation at 20-22% for the financial year 2023-24, with inflation expected to fall sharply from 1 January 2024. In contrast, the Consumer Price Index (CPI) for O October 2023 hit a 10-month low of 26.9%, versus a four-month high recorded in September 2023.
Published in The Express Tribune, November 11u2023.
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