Food and fuel prices keep fuelling inflation

F.P. Report

ISLAMABAD: The Sensitive Price Indicator (SPI) witnessed a surge for the seventh consecutive week after an increase in food and fuel prices, the latest figures released by the Pakistan Bureau of Statistics show.

Hence, the SPI was recorded at 279.89 points against 277.21 registered in the previous week, according to the PBS data released on Friday, as the prices of 32 items increased, five decreased and 14 items remained unchanged.

For the week ending September 7, the upward movement in SPI from 277.21 points to 279.89 points was mainly a result of 17 per cent hike in tomatoes price followed by masoor pulse 10.87pc, sugar 6.73pc and garlic 4.66pc.

As far as the non-food items are concerned, the diesel price was up diesel 6.28pc, LPG 5.19pc and petrol 5.12pc.

When it comes to the year-on-year comparison, the increase in SPI stood at 26.32pc mainly due to wheat flour 117.71pc, gas 108.38pc, sugar 107.36pc, cigarettes 100.16pc, rice basmati broken 90.66pc, tea Lipton 88.41pc, chilies powder 86.05pc, rice irri-6/9 84.18pc, gur 72.83pc, salt powdered 52.07pc, powdered milk 42.45pc and bread 42.33pc.

Earlier this week, the Ministry of Finance said the massive hike in fuel prices and power tariff in August would increase inflation in the coming months, in yet another indirect admission of the policy failures guided by the International Monetary Fund (IMF), which have made the lives of an overwhelming majority miserable in Pakistan.

This admission is bad news on another count, as rising inflation means Pakistan may well see another rate hike under the tight monetary policy followed by the State Bank of Pakistan and strictly recommended by the IMF.

In another document ‘Fiscal Risk Statement’ the Ministry of Finance had stated that Pakistan remained vulnerable to key macroeconomic variables – low GDP growth, high interest rates, skyrocketing inflation and the depreciating exchange rate.