Short-term inflation surges to 12.31pc due to costly food, LPG

In the week ending November 5, the short-term inflation rate in Pakistan surged to 12.31 percent year-on-year, primarily driven by the rising costs of liquefied petroleum gas (LPG) and perishable food items, according to official data from the Pakistan Bureau of Statistics (PBS). The index, which monitors 51 essential commodities from 50 markets across 17 cities, is updated weekly to measure price changes in vital goods and services.

The double-digit inflation has persisted for several weeks due to persistent hikes in petroleum and diesel prices, although oil prices have been gradually decreasing over the past three days. Despite this downward trend, the substantial increase in LPG prices has significantly contributed to the overall inflation surge.

Of the 51 monitored items, 21 (41.18 percent) saw price increases, while 10 (19.60 percent) experienced declines, and 20 (39.22 percent) remained stable. The Sensitive Price Index (SPI), which tracks short-term inflation, rose marginally by 0.29 percent week-on-week, indicating fluctuations in both food and non-food sectors. The government's unwillingness to lower the petroleum levy has resulted in continuous hikes in petrol and diesel prices.

These energy cost increases not only fuel inflation but also indirectly boost sales tax collections through higher prices of goods and services, exemplifying cost-push inflation where rising energy costs lead to higher food prices.

The largest weekly price increases were observed in tomatoes (54.18 percent), LPG (3.72 percent), potatoes (2.07 percent), eggs (1.17 percent), garlic (1.06 percent), firewood (1.01 percent), salt powder (0.91 percent), plain bread (0.64 percent), fresh milk (0.49 percent), curd (0.41 percent), match boxes (0.16 percent), and shirting (0.15 percent).

Conversely, petrol (4.20 percent), diesel (2.97 percent), pulses (1.08 percent), bananas (0.85 percent), onions (0.82 percent), powdered milk (0.73 percent), chicken (0.61 percent), sugar (0.40 percent), wheat flour (0.34 percent), and pulse moong (0.27 percent) recorded week-on-week price decreases. On an annual basis, the notable price increases included LPG (114.88 percent), tomatoes (78.89 percent), electricity for Q1 (52.38 percent), diesel (39.27 percent), petrol (36.34 percent), wheat flour (33.95 percent), chicken (31.81 percent), chili powder (15.55 percent), mutton (14.54 percent), onions (13.64 percent), plain bread (12.35 percent), and beef (11.06 percent).

On the other hand, potato prices dropped by 37.24 percent, followed by eggs (27.59 percent), sugar (25.03 percent), salt powder (14.09 percent), gur (7.75 percent), pulse masoor (7.49 percent), pulse moong (6.79 percent), and IRRI-6/9 rice (1.79 percent).