Weekly inflation rose 3.38% weekly and 27.82% year on year during the week ended June 16, reaching a 14-year high following a significant increase in gasoline and diesel prices to placate the International Monetary Fund (IMF).
According to data released by the Pakistan Bureau of Statistics (PBS) on Friday, prices for 71% of the commodities in the sensitive pricing index (SPI) basket increased.
Diesel (28.91%), gents sponge chappal (26.76%), gents sandal (15.40%), chicken (12.10%), petrol (11.43%), potatoes (6.89%), electricity charges for Q1 (6.63%), cigarettes (6.27%), cooked daal (5.90%), pulse gramme (5.29%), and cooked beef (5.29 percent) all saw price increases (5.19%).
The aggregate impact of these commodity price increases was 2.53% overall SPI for the combined group.
In his note, Fahad Rauf, head of research at Ismail Iqbal Securities, linked the rise in the sensitive pricing index (SPI) to solid increases in petrol, electricity, and chicken prices.
“The magnitude of the increase has not been witnessed since the 2008 global financial crisis,” he said, adding that inflationary pressures will persist if electricity and gas price increases are announced soon.
“Based on current figures, we predict June 2022 CPI (consumer price index) to be 17.6%,” Rauf added, noting that the withdrawal of electricity subsidies outlined in the prime minister’s package had not yet been reflected in SPI readings. “If elimination is included, CPI would increase by 19% yearly.”