Islamabad: The persistent challenge of inflation in Pakistan has resurfaced with greater intensity, as the weekly inflation rate once again recorded an upward trend. According to the latest report issued by the Federal Bureau of Statistics (PBS), inflation rose by 0.31 percent in the past week alone, marking the second consecutive weekly increase. On an annual basis, the inflation rate now stands at 2.21 percent, reflecting the ongoing volatility in prices of essential commodities across the country.
Weekly Inflation Report Highlights
The Sensitive Price Indicator (SPI), which tracks the prices of 51 essential items across 50 markets in 17 cities, revealed that:
- Tomatoes, chicken, eggs, onions, garlic, wheat flour, jaggery, dal mash, and firewood witnessed a notable increase in prices.
- On the contrary, items like bananas, potatoes, gram lentils, moong lentils, masoor dal, ghee, salt, rice, and LPG became relatively cheaper.
- Prices of 25 essential goods, including fresh milk, yogurt, cigarettes, and bread, remained stable compared to the previous week.
Specific Price Increases
The report highlighted the following changes in commodity prices:
- Tomatoes: Increased by Rs 10.42 per kg.
- Chicken: Increased by Rs 19.67 per kg, adding pressure to household food budgets.
- Eggs: Became more expensive by Rs 6.19 per dozen.
- Sugar: Increased slightly by Rs 0.52 per kg, despite government monitoring.
- Wheat Flour: Became costlier by Rs 21.18 per bag, a concerning rise given its status as a staple food item.
Items That Became Cheaper
Despite the inflationary wave, some items witnessed a reduction in prices:
- Bananas: Dropped by around Rs 4 per dozen.
- Potatoes: Decreased by Rs 1.37 per kg.
- Domestic LPG Cylinder: Became cheaper by Rs 10.39, providing some relief to households that rely on LPG for cooking.
- Prices of lentils, chickpeas, rice, and salt also declined modestly.
Inflation by Income Groups
The impact of inflation is not uniform across different income groups. The PBS data showed:
- For households earning up to Rs 17,732 per month, the annual inflation rate was 2.22 percent, reflecting a weekly increase of 0.31 percent.
- For those earning between Rs 17,733 and Rs 22,888 per month, inflation stood at 2.99 percent, rising 0.33 percent this week.
- For the income bracket of Rs 22,889 to Rs 29,517 per month, inflation was 2.47 percent, up by 0.31 percent.
- Families earning between Rs 29,518 and Rs 44,175 per month experienced 2.15 percent inflation, with a weekly increase of 0.33 percent.
- Interestingly, for the highest income group earning above Rs 44,176 per month, inflation fell by 0.31 percent to 1.46 percent.
This disparity underscores how rising food and energy costs disproportionately affect low- and middle-income groups, while wealthier households are somewhat shielded.
The Broader Economic Picture
The recent spike in weekly inflation cannot be seen in isolation. Pakistan’s economy has been under immense strain due to a combination of factors:
- Global Commodity Prices: Volatility in international food and fuel markets directly impacts Pakistan, which remains heavily import-dependent.
- Currency Depreciation: Fluctuations in the value of the Pakistani rupee against the US dollar push up the cost of imports.
- Climate Impact: Extreme weather conditions, including floods and irregular rainfall, have disrupted agricultural production, limiting the supply of fruits, vegetables, and wheat.
- Supply Chain Disruptions: Transportation bottlenecks and rising fuel costs increase the cost of moving goods from farms to markets.
Impact on Households
For an average household in Pakistan, the weekly inflation translates into shrinking purchasing power and difficult choices between essential needs. Families are increasingly forced to cut back on:
- Protein intake (chicken, eggs, pulses).
- Fresh produce (vegetables and fruits).
- Energy consumption (LPG and firewood).
Middle- and lower-income groups, particularly those living in urban centers, are the hardest hit as they rely heavily on markets for food rather than homegrown produce.
Government Response
The government has taken note of the rising inflationary trend. Measures under consideration include:
- Price Monitoring Committees: Local administrations have been directed to monitor prices in wholesale and retail markets.
- Subsidized Utility Stores: Providing essential commodities like flour, sugar, and ghee at subsidized rates through the Utility Stores Corporation.
- Import Adjustments: Exploring temporary imports of essential food items such as onions, garlic, and tomatoes to stabilize local supply.
- Targeted Relief for Low-Income Groups: Expanding programs like Ehsaas and Benazir Income Support Programme (BISP) to cushion vulnerable segments of society.
Expert Opinions
Economists and analysts warn that unless structural issues are addressed, inflation will remain a recurring challenge.
- Dr. Hafiz Pasha, a renowned economist, notes that inflation in Pakistan is not just cyclical but structural due to weak agricultural productivity, energy shortages, and dependence on imports.
- Market analysts also point out that the gap between wholesale and retail prices indicates profiteering and poor market regulation.
- Experts argue for long-term reforms in agriculture, energy, and taxation to control inflation sustainably.
Social and Political Implications
Inflation is not merely an economic issue; it has deep social and political ramifications:
- Rising food prices often trigger public protests, especially in urban areas.
- Opposition parties frequently use inflation as a political weapon against the government.
- Sustained high inflation erodes trust in institutions and fuels discontent, making governance more difficult.
Conclusion
The latest weekly inflation figures highlight once again how fragile Pakistan’s economic landscape remains. While some essential items saw a price decline, the overall increase in staples such as wheat flour, chicken, eggs, and sugar has deepened public frustration.
The government faces the dual challenge of short-term stabilization and long-term reform. Immediate measures such as monitoring markets, controlling hoarding, and providing subsidies are critical to easing the burden on citizens. At the same time, structural reforms in agriculture, energy, and trade policies are essential to ensure long-term price stability.
Until then, ordinary households will continue to feel the brunt of inflation, with the poorest and most vulnerable segments of society hit the hardest.
