Hike in petrol, food prices push weekly inflation up by 0.78%

The price increases for petrol, rice and sugar were the most significant contributors to the country’s Sensitive Price Index (SPI), which continued to grow during the week ending August 17, 2023.

The Pakistan Bureau of Statistics (PBS) said on Friday that weekly inflation increased by 0.78%, while annual inflation increased by 27.57%, a little decrease from last week’s 30.82%.

The PBS ascribed the increase in the SPI to higher prices for a variety of everyday products such as chilli powder, rice, sugar, poultry, petrol, and diesel, which totalled more than 7%.

Meanwhile, prices for tomatoes, cooking oil, ghee, wheat flour, and other products have fallen by up to 13%.

The SPI was 275.57 points for the week under review, compared to 273.43 points the previous week and 216.02 points the week ended August 18, 2022.

According to Fahad Rauf, head of research at Ismail Iqbal Securities, the increase was primarily due to increasing gasoline prices, but it is important to note that the prices of other key food commodities, such as rice and sugar, also climbed. Some of these can be attributed to the growth in global pricing.

“Due to the high base effect, the CPI (consumer price index) is expected to fall in August.” However, monthly inflation continues to grow. Furthermore, given the recent currency loss, more inflationary pressures may be generated,” Rauf remarked.

SPI is compiled by PBS by gathering prices for 51 key commodities from 50 markets in 17 cities around the country. Prices of 32 (62.75%) products climbed throughout the week, 7 (13.72%) items declined, and 12 (23.53%) items were steady.

Rising inflation has widened the wealth divide significantly, with the working classes bearing the brunt of the consequences. Food is becoming increasingly out of reach for individuals working in the informal economy on minimum or even lower wages.

A wheat flour bag cost Rs385.73/10kg (Rs771.46/20kg) for the week ending August 16, 2018, according to PBS archives, and a person earning Rs15,000 minimum wage spent 5% of their income on the vital commodity.

Currently, at Rs32,000 per month, a person spends 9% of their minimum income on a 20kg bag of wheat flour, which sells for Rs2,824.73 on average.

Similarly, spending on cooking oil increased from 6% of the minimum wage in August 2018 to 9% in 2023. In August 2018, the price of cooking oil was Rs960/5 litres; it is now Rs3,019.66/5 litres.

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