Weekly inflation slightly eases as prices of 10 essential items decline

ISLAMABAD: Pakistan’s short-term inflation, measured by the Sensitive Price Indicator (SPI), saw a slight decrease of 0.34 per cent during the week ending December 5, as prices for 10 essential items fell.

However, on a year-on-year (YoY) basis, weekly inflation rose by 3.57 per cent compared to the same period last year.

According to the latest report released by the Pakistan Bureau of Statistics (PBS), despite a reduction in some prices, more items saw an increase, with the prices of 18 items rising in the outgoing week. Nonetheless, the overall impact of these increases appeared smaller compared to the price reductions.

For context, the SPI tracks the prices of 51 essential items, collected from 50 markets across 17 cities in the country. During the week, prices of 18 items (35.29 per cent) increased, 10 items (19.61 per cent) decreased, while 23 items (45.10 per cent) remained stable.

On a weekly basis, notable decreases were observed in the prices of tomatoes (25.15 per cent), chicken (9.90 per cent), pulse mash (1.67 per cent), pulse gram (0.73 per cent), and wheat flour (0.71 per cent).

In contrast, significant increases were recorded in the prices of garlic (1.83 per cent), vegetable ghee (2.5kg) (1.72 per cent), potatoes (1.69 per cent), petrol (1.48 per cent), and sugar (1.33 per cent).

The weekly SPI percentage change by income groups showed a decrease across all income levels, ranging from -0.28 per cent to -0.45 per cent. The lowest income group experienced a drop of 0.44 per cent, while the highest income group saw a 0.28 per cent decline.

On a yearly basis, analysis of SPI changes across different income segments revealed an increase in inflation, ranging from 3.46 per cent to 3.78 per cent.

Meanwhile, the average price of cement fell to Rs1,420 per 50kg bag, marking a 0.38 per cent decrease from the previous week but remaining 14.12 per cent higher than last year’s prices.

The recent and steady decline in inflation has fuelled speculation that the State Bank of Pakistan’s (SBP) Monetary Policy Committee may consider announcing a policy rate cut in its upcoming meeting.