According to data released by the Pakistan Bureau of Statistics (PBS) on Friday, short-term inflation, as measured by the Sensitive Price Index (SPI), reached an all-time high of 46.65% year-on-year (YoY) for the week ending on March 22. The rise in inflation was primarily driven by a significant increase in food prices. Last week, short-term inflation was recorded at 45.64% YoY.
On a week-on-week basis, short-term inflation increased by 1.80% due to a surge in the prices of tomatoes, potatoes, and wheat flour. The SPI monitors the prices of 51 essential items based on a survey of 50 markets in 17 cities across the country. During the week under review, the prices of 26 items increased, 12 decreased, and 13 remained stable.
The YoY rise in the prices of onions was the highest at 228.28%, followed by cigarettes at 165.88%, wheat flour at 120.66%, gas charges for Q1 at 108.38%, and diesel at 102.84%. In contrast, chillies powdered saw the highest YoY fall at 9.56%.
On a WoW basis, the prices of tomatoes rose by 71.77%, wheat flour by 42.32%, potatoes by 11.47%, bananas by 11.07%, and Lipton tea by 7.34%. The prices of chicken saw the highest WoW fall at 8.14%, followed by chillies powdered at 2.31%, mustard oil at 1.19%, garlic at 1.19%, and pulse gram at 1.06%.
Last month, prices rose at the fastest pace ever in the country's history, according to available data, with food, beverage, and transport costs driving inflation to a point where analysts fear that "families will have to make choices and sacrifices." Measured by a basket of products called the Consumer Price Index (CPI), monthly inflation jumped to 31.6% in February YoY. This was the highest annual rate since July 1965, according to the research firm Arif Habib Ltd.
To increase revenue through taxes, the government is undertaking belt-tightening measures and has allowed the rupee to depreciate as it negotiates a deal with the International Monetary Fund (IMF) to secure more than $1 billion in funding.
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