Weekly inflation eased down slightly to 0.06 percent week-on-week, while keeping its upward momentum at 19.36 percent year-on-year, showing no relief to the lower and middle income groups during the seven-day period ended January 20, 2022, official data showed on Friday.
Pakistan Bureau of Statistics (PBS) attributed the decline in sensitive price indicator (SPI) to decrease in prices of food items chicken (7.74 percent), onions (4.47 percent), potatoes (1.89 percent), eggs (1.67 percent), pulse moong (0.89 percent) , sugar (0.39 percent) and non-food item electricity for Q1 (1.88 percent).
The joint impact of this decrease in prices came down to 0.59 percent in overall SPI for the combined group.
Analyst Fahad Rauf of Ismail Iqbal Securities in his note said the slight decrease in SPI was due to decline in prices of chicken and electricity; however, this declined was limited due to the increase in prices of tomatoes and petrol.
“We expect CPI (consumer price index) to come at 12.7 percent in January 2022 vs 12.3 percent in December 2021.”
The MoM inflation would remain muted at 0.1 percent, where food inflation would be negative (seasonal), while electricity fuel price adjustment would also be lower than the previous month. On the other hand, house rent revision and petroleum price increase would offset the impact, the note said.
Different weightages have been assigned to the commodities in the SPI basket. Heavyweights for the lowest quintile include milk (17.5449 points), electricity (8.3627 points), wheat flour (6.1372 points), sugar (5.1148 points), firewood (5.0183 points), long cloth (4.2221 points), and vegetable ghee (3.2833 points).
Of these commodities, WoW prices of milk, wheat flour and firewood increased, electricity and sugar declined, whereas no change was noted in the prices of long cloth and vegetable ghee. However, prices of all these commodities have increased when compared with last year.
Unpackaged milk, which was being sold at Rs105.18/litre last year, increased by Rs10.22 to stand at Rs115.4/litre. Firewood, which has now become essential for many urban households due to the gas crisis, now costs Rs822.21/40kg. It was Rs805.98/40kg last week and Rs740.61/40kg last year.
Similarly, wheat has risen once again, and a 20kg bag of flour is now available for Rs1,163.97, up Rs3.12 WoW and Rs216.8 YoY. During the week ended January 18, 2018, wheat flour was available for Rs775.48/20kg bag.
SPI for the groups spending Rs17,732-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175 showed a decrease of 0.13 percent, 0.05 percent, and 0.01 percent each for the last two groups, respectively. However, SPI went up 0.02 percent WoW and 20.85 percent YoY for those with the lowest spending capacity of up to Rs17,731. On YoY basis, all expenditure groups suffered from price hikes.
The YoY trend depicted an increase of 19.82 percent, with electricity for Q1 up 81.39 percent, LPG up 52.39 percent, men’s sponge chappal up 50.25 percent, cooking oil 5 litre up 49.83 percent, mustard oil up 46.28 percent, vegetable ghee 1kg up 45.88 percent, vegetable ghee 2.5kg up 45.4 percent, washing soap up 44.79 percent, gents sandal up 44.49 percent, pulse masoor up 38.55 percent, petrol up 34.87 percent, and diesel up 27.35 percent. Major decrease was observed in the prices of pulse moong (27.20 percent), chilli powder (6.71 percent), tomatoes (6.04 percent) and onions (1.47 percent).
For the week under review, SPI was recorded at 167.29 points against 167.39 points registered previously.
SPI is computed on weekly basis to assess the price movements of essential commodities at shorter intervals of time so as to review the price situation in the country. It comprises of 51 essential items and the prices are collected from 50 markets in 17 cities of the country.
During the week, prices of 24 items increased, 7 decreased, while prices of 20 items remained unchanged.
Government is being criticised for increasing the prices of petroleum and electricity under fuel adjustment, as well as proposing 17 percent general sales tax in the mini budget awaiting the approval of the Senate.