Weekly inflation in Pakistan witnesses largest drop since September 2022

WEB DESK: In the latest economic update, the Weekly Sensitive Price Indicator (SPI) for the Combined Group exhibited a noteworthy decline of 1.7 per cent Week-over-Week (WoW) during the week ending October 19, 2023.

This decline contrasts sharply with the corresponding period from last year, showing a significant increase of 35.45 per cent Year-over-Year (YoY).

This drastic dip, marking the most substantial WoW drop since September 22, 2022, can be attributed to the government’s recent strategic moves.

On October 15, the government responded to the appreciating Pakistani rupee (PKR) against the US dollar and falling global oil prices by announcing substantial reductions in petrol and diesel prices. The new prices settled at Rs283.38 and Rs303.18 per litre, following a reduction of Rs40 and Rs15 per litre, respectively.

Data released by the Pakistan Bureau of Statistics (PBS) illustrated the impact of these changes. The Combined Index, which stood at 282.86 on October 12, 2023, experienced a decline to 278.04.

A comparative analysis revealed that a year ago, on October 20, 2022, the index was at 205.27, indicating significant fluctuations in the market.

Among the 51 items surveyed, 14 experienced an increase in average prices, 24 saw a decrease, and 13 remained stable. When categorized by income groups, the SPI percentage change showcased a consistent decrease, ranging from 0.88 per cent to 2.02 per cent.

The lowest-income group experienced a 0.88 per cent decrease, while the highest-income group recorded a 2.02 per cent drop.

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On an annual basis, SPI changes were analysed across different income segments, revealing increases between 31.19 per cent and 37.79 per cent. The lowest-income group observed a substantial rise of 34.96 per cent, while the highest-income group experienced a 31.19 per cent increase.

In specific commodity sectors, the average price of Sona urea saw a slight decrease, standing at Rs3,784 per 50 kg bag. Although this represents a 0.42 per cent reduction from last week’s price, it still reflects a significant 55.08 per cent increase from last year.

Similarly, the average cement price dropped to Rs1,199 per 50 kg bag, marking a 0.17 per cent decrease from the previous week yet indicating a 16.71 per cent rise compared to last year’s prices.

This data underscores the impact of the government’s economic measures, providing a comprehensive picture of the market’s response to recent policy changes. As the nation navigates these economic shifts, monitoring these indices will remain crucial for both policymakers and the general populace.