KARACHI: Inflationary pressures in Pakistan eased significantly, with the Sensitive Price Indicator (SPI) rising by just 1.16% year-on-year for the week ending January 16—the lowest rate recorded in months. On a weekly basis, the SPI dropped by 0.39%, driven by falling prices in key food items, according to the Pakistan Bureau of Statistics (PBS).
Tomatoes saw the sharpest weekly decline, falling 18.31%, followed by potatoes (-10.42%), onions (-10.01%), and eggs (-8.64%). Other notable decreases included chicken (-2.17%), liquefied petroleum gas (-1.21%), and mustard oil (-0.67%).
Conversely, prices for some items rose during the week. Bananas saw the largest increase at 3.22%, followed by petrol (+1.39%). Other notable price hikes included vegetable ghee (1.08% for 2.5 kg and 0.74% for 1 kg), cooking oil (+1.01%), firewood (+1.00%), and diesel (+0.99%).
Out of the 51 essential items monitored across 17 cities, 21 items recorded price increases, 10 saw declines, and 20 remained stable.
Year-on-year data painted a mixed picture. Certain items experienced significant price increases, such as ladies’ sandals (+75.09%), potatoes (+47.91%), gram pulses (+39.77%), and moong pulses (+33.40%). However, other items, like onions (-47.22%), wheat flour (-35.89%), and eggs (-31.92%), witnessed steep declines. Chillies powder (-20.00%) and tomatoes (-19.83%) also offered some relief to consumers.
Inflation impacts varied by income level. Households earning less than Rs17,732 per month experienced a marginal 0.20% increase in inflation, while those earning above Rs44,175 per month saw a higher rise of 1.66%.
The easing inflation could influence the State Bank of Pakistan’s (SBP) monetary policy. With the SPI showing consistent improvement, the central bank may consider adjusting its policy rate, currently at 13%, to foster economic growth.
SBP Governor Jameel Ahmad noted that inflation might decline further in January but could rise later due to base effects and higher energy costs. The SBP expects inflation to remain within its target range of 5-7%.
Arif Habib Limited (AHL) forecasts a significant drop in headline inflation to 3.06% in January—the lowest in nine years. The consumer price index inflation already slowed to 4.1% in December, compared to 4.9% in November.
