KARACHI: Pushed by food and energy prices, Pakistan’s short-term inflation rate spiked by 3.73% during the week that ended on July 26, according to data released by the Pakistan Bureau of Statistics (PBS), with analysts saying on Friday this was the highest rate since October 2022.
A major increase was observed in the prices of food items, including a 28.98% increase in the price of chili powder, 19.71% of tomatoes, 4.77% of eggs, 20.98% of electricity charges for the first quarter (Q1) and 4.12% of LPG prices.
Annual basic inflation increased by 29.21%, pushed by 132.36% increase in wheat flour rates, 110.75% in cigarettes, 108.38% in gas charges, 79.60% in broken basmati rice, 63.72% in sugar, 62.65% in potatoes and 18.06% in electricity for Q1 on a year-on-year basis.
Analysts said the weekly inflation rate hike was the highest since October last year when it increased by 4.13%.
“This is the highest weekly change in SPI since October 2022 when the currency was massively depreciated,” Samiullah Tariq, Director Research at Pakistan Kuwait Investment Company, told Arab News on Friday.
Inflation, measured by the Consumer Price Index (CPI), reached on all-time high of 38% in May, but eased to 29.4% on a year-on-year basis in June 2023 as compared to 21.3% in June 2022.
“Inflation in July 2023 is expected to ease out compared to the month of June 2023,” the Ministry of Finance said in a report released on Wednesday.
“The recent decrease in administered prices of petrol and diesel will be transmitted into lower domestic prices of essential items by impacting the transportation cost.”
As inflation remains stubborn at elevated levels, the central bank is expected to further hike the key interest rate in its next monetary policy on Monday.
“The central bank is expected to jack up the policy rate by 100 basis points to 23%,” Tariq said, hoping the move would help “control inflation.”