SPI inflation rises to 42.27%

Commodity prices surged due to supply constraints, rupee devaluation

The price of essential goods, particularly that of onions, rice, pulses and petroleum products, spiked to 42.27% in the week ended March 9, 2023, ahead of the holy month of Ramzan, reported the Pakistan Bureau of Statistics (PBS).

The Sensitive Price Index (SPI), comprising of 51 essential commodities, rose by 1.37% in the week under review, compared to the week-ending on March 2.

According to the PBS data, the price of onions increased 305.23% in the week, compared to the same week of the last year. Cigarettes became expensive by 165.86%, gas charges for Q1 jumped 108.38%, the price of diesel rose by 93.82%, eggs by 78.63%, rice Irri-6/9 by 78.14%, petrol by 77.89% and basmati rice (broken) by 77.27%.

In the fruit category, the price of bananas increased by 74.01% in the week. Among pulses, the price of moong rose by 72.54%, mash by 56.02% and gram by 55.97%.

Similarly, the price of tea (Lipton) surged by 66.31% and the price of bread went up by 55.36% in the week compared to the same week of the previous year.

In an opposing trend, the price of tomatoes dropped by 41.79% in the week compared to the same week of last year, and chilli powder became cheaper by 7.42%. Among utilities, electricity charges for Q1 came down by 6.64%. The price of commodities is on the rise partially due to supply constraints and a massive devaluation of the rupee in recent times.

The rupee has deprecated by 18%, or Rs50, in the past six weeks to Rs281 against the US dollar in the interbank market on Friday.

The SPI inflation has also made imports exorbitantly expensive – a worrying fact as the country meets most of its local demand for energy and partial demand for food through imports. To control the high inflation reading, the central bank has increased its key policy rate by a massive 300 basis points in March to a record high of 20%. The move, however, has hit economic activities adversely and has rendered millions of people jobless.

Date: 12-Mar-2023