Rising flour prices fuel weekly inflation

Official statistics released by the Pakistan Bureau of Statistics (PBS) on October 22 revealed that short-term inflation in the week to October 22 reached 11.85 percent year-on-year, primarily driven by a surge in wheat flour prices. The index, which monitors 51 essential items from 50 markets across 17 cities, is compiled weekly to track price fluctuations in vital commodities and services.

Persistent increases in petroleum prices have contributed to sustained double-digit inflation for several weeks. Of the 51 items assessed, 19 (37.72 percent) experienced price hikes, 12 (23.53 percent) saw declines, while 20 (39.22 percent) remained steady.

The Sensitive Price Index (SPI), which tracks short-term inflation, increased marginally by 0.65 percent week-on-week, reflecting the varying price trends in food and non-food items. The government's refusal to reduce petroleum levies has led to continuous hikes in petrol and diesel prices, exacerbating inflationary pressures and indirectly boosting sales tax revenues through higher prices of goods and services. This form of cost-push inflation, stemming from rising energy costs, has subsequently impacted food prices.

The commodities with the most significant price increases over the previous week included liquefied petroleum gas at 22.44 percent, chicken at 12.20 percent, onions at 4.19 percent, shirts at 1.86 percent, plain bread at 1.66 percent, wheat flour at 1 percent, garlic at 0.74 percent, firewood at 0.71 percent, georgette and one kilogram of vegetable ghee each at 0.59 percent, beef at 0.31 percent, and pulse mash at 0.30 percent.

Conversely, tomatoes saw the most notable price drop of 21.99 percent, followed by petrol (3.63 percent), banana (2.42 percent), diesel (1.68 percent), potatoes (1.38 percent), pulse gram (0.93 percent), eggs (0.58 percent), powdered milk (0.38 percent), broken rice basmati, and sugar (0.35 percent each).

On an annual basis, the items with the highest price hikes were LPG (107.12 percent), onions (72.81 percent), electricity for Q1 (58.59 percent), petrol (44.17 percent), diesel (41.56 percent), chicken (38.99 percent), wheat flour (36.49 percent), chili powder (15.55 percent), mutton (14.66 percent), beef (12.10 percent), plain bread (10.82 percent), and tea prepared (8.36 percent).

In contrast, tomato prices plummeted by 71.72 percent, followed by potatoes (40.75 percent), sugar (25 percent), eggs (22.14 percent), salt powder (14.86 percent), pulse masoor (9.08 percent), gur (8.98 percent), and pulse moong (7.05 percent).