Weekly inflation reverses trend

In Business
April 06, 2024



KARACHI:

The weekly inflation reading surprisingly surged 0.96% in the week ended April 4, 2024, fuelled by a hike in prices of food items, energy and footwear.

This marked the end of slowdown in the week-on-week inflation recorded in the prior two weeks.

According to data compiled by the Pakistan Bureau of Statistics (PBS), prices of ladies’ sandal (footwear) increased 12.52% to Rs899 per pair ahead of Eid celebrations next week.

It was followed by an 11.93% rise in tomato prices that reached Rs103.77 per kg compared to Rs92.71/kg last week.

Gents’ sandal became expensive by 8.70% to Rs2,499/pair, rising from Rs2,299 in the previous week.

During the week under review, the petrol price rose 3.45% to Rs290.47/litre compared to Rs280.79 last week.

Prices of other commodities increased up to 3%, which included chicken, long cloth, onion, bread, beef, garlic, mutton and rice.

The weekly inflation, measured by the Sensitive Price Indicator (SPI), tracks 51 essential commodities from 50 markets in 17 cities nationwide.

Out of the 51 commodities, prices of 16 (31.37%) items increased, 13 (25.49%) items decreased and 22 (43.14%) items remained unchanged as compared to the previous week.

PBS said the weekly inflation rose 29.45% when compared with the same week of last year, caused by a 570% spike in gas prices for Q1, followed by a 107.59% increase in onion prices.

Prices of other essential goods rose up to 86.05%, which included onion, chilli powder, gents’ sandal, gents sponge chappal, garlic, tomato, gur, salt powder, energy savers, mash pulse and prepared tea in the week under review compared to the previous year.

The benchmark monthly inflation, measured through the Consumer Price Index (CPI), slowed down to 20.7% in March from the multi-decade high of 38% in May 2023.

Finance Minister Muhammad Aurangzeb has voiced hope that inflation will continue to taper off primarily in the wake of a high base effect, which may lead to the first rate cut by the central bank soon.

Financial market experts point out that the real interest rate – current interest rate minus inflation reading – has entered into the positive territory at 1.30% after a hiatus of 37 months following the deceleration in CPI-based inflation in March.

Published in The Express Tribune, April 6th, 2024.

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