Food prices threaten to slow weekly SPI decline
Pakistan's weekly inflation remained up at 0.05 percent week-on-week and 25.34 percent year-on-year, driven by rising food prices, particularly onions, pulse masoor, sugar, garlic, and eggs.
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Posted 8/26/2023, 1:00:00 AM
thenews.com.pk
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The fall in the value of the Pakistani rupee against the US dollar is expected to cause a surge in inflation, with petrol and diesel prices projected to increase by over Rs13 per litre due to the exchange rate, potentially reaching double digits if the dollar continues to appreciate. Additionally, the rise in dollar value will also lead to further increases in electricity tariffs, making the lives of citizens more difficult.
Pakistan's inflation rate remained above target in August at 27.4%, driven by reforms linked to an IMF loan that have fueled price pressures and declines in the rupee currency.
The State Bank of Pakistan has announced that it will maintain its key policy rate at 22%, citing a continuing declining trend in inflation, improved agricultural outlook, and recent administrative and regulatory measures to address supply constraints and illegal activity. The bank hopes that inflation will subsequently decline in October.
The short-term inflation in Pakistan increased by 26.25% due to a rise in the retail price of vegetables, particularly tomatoes and onions, caused by the closure of the Torkham border with Afghanistan.
The unprecedented increase in fuel prices in Pakistan is expected to cause a significant rise in inflation, with the Consumer Price Index projected to reach as high as 30% to 32% in September 2023.