Short-term inflation clocks in at 11.21pc

Islamabad witnessed a short-term inflation rate of 11.21 per cent year-on-year in the week ending on November 12, as reported by the Pakistan Bureau of Statistics (PBS) on Friday. This figure, calculated based on 51 essential items monitored across 17 cities, indicates a significant increase in prices of perishable food products.

Among the 51 items tracked, 19 (37.25 per cent) saw price rises, 9 (17.65 per cent) experienced declines, while 23 (45.10 per cent) remained stable. The persistent rise in petroleum and diesel prices has largely contributed to the double-digit inflation over several weeks. However, oil prices have been gradually declining over the past few days, and this trend is expected to be reflected in the upcoming review.

Despite this, the sharp increase in LPG prices has been the main driver of the inflation surge. The Sensitive Price Index (SPI), which measures short-term inflation, saw a slight decrease of 0.46 per cent week-on-week, indicating the impact of fluctuating prices in both food and non-food sectors. The escalation in energy costs is not only intensifying inflation but also indirectly boosting sales tax revenue as goods and services become more expensive.

This phenomenon, known as cost-push inflation, occurs when rising energy prices lead to higher food prices. Consequently, households are experiencing mounting pressure from increased consumer prices. The items that recorded the most substantial price hikes over the previous week included tomatoes (12.06 per cent), eggs (5.98 per cent), potatoes (2.42 per cent), garlic (1.76 per cent), chicken (1.32 per cent), firewood (1.10 per cent), wheat flour (0.94 per cent), pulse masoor (0.64 per cent), beef (0.47 per cent), and LPG (0.30 per cent).

Conversely, the following items witnessed price reductions over the same period: petrol (7.42 per cent), diesel (6.10 per cent), onions (1.70 per cent), bananas (1.03 per cent), gur (0.59 per cent), sugar (0.43 per cent), powdered milk (0.36 per cent), pulse moong (0.32 per cent), and pulse gram (0.08 per cent). On an annual basis, the highest price increases were observed for LPG (111.35 per cent), tomatoes (78.94 per cent), electricity for the first quarter (52.38 per cent), wheat flour (36.14 per cent), diesel (30.77 per cent), petrol (26.23 per cent), onions (19.67 per cent), chili powder (15.55 per cent), mutton (14.67 per cent), plain bread (12.35 per cent), beef (11.30 per cent), and chicken (10.98 per cent).

On the other hand, potato prices dropped by 36.41 per cent, followed by sugar (24.54 per cent), eggs (23.29 per cent), salt powder (12.51 per cent), pulse masoor (7.21 per cent), pulse moong (6.83 per cent), gur (6.63 per cent), and bananas (3.35 per cent). Last week, short-term inflation peaked at 12.31 per cent year-on-year, primarily driven by LPG and perishable food products.