SPI shoots up 4.13pc on power tariff surge

KARACHI: Weekly inflation jumped 4.13 percent week-on-week and 30.68 percent year-on-year spurred by a massive rise of 89.34 percent in electricity rates for the quarter.

Pakistan Bureau of Statistics (PBS) data issued on Friday attributed the WoW increase in the sensitive price indicator (SPI) to the rising prices of electricity Q1 (89.34 percent), salt (2.57 percent), tea (1.89 percent), energy saver (1.57 percent), firewood (1.31 percent), rice IRRI-6/9 (1.24 percent) and garlic (1.04 percent).

During the previous week ended October 20, SPI increased 0.35 percent WoW and increased 27.13 percent YoY.

Fahad Rauf, head of research at Ismail Iqbal Securities, said the WoW increase mainly emanates from rise in electricity charges. “To recall, there was a FCA adjustment made in September of negative Rs10/unit,” he said, explaining that the government had decided to defer June FCA of Rs10/unit, but since it was already booked in August inflation, hence it was adjusted in September.

“We estimate Oct (consumer price index) inflation at 25.7 percent vs 23.2 percent in September,” Rauf added. “Key drivers of inflation will be electricity prices, house rent revision, and prices of perishable items.”

Different weightages are assigned to various commodities in the SPI basket. Commodities with the highest weights for the lowest quintile include milk (17.5449 percent), electricity (8.3627 percent), wheat flour (6.1372 percent), sugar (5.1148 percent), firewood (5.0183 percent), long cloth (4.2221 percent), and vegetable ghee (3.2833 percent).

Of these commodities, prices of electricity, wheat flour, firewood, and vegetable ghee 2.5kg went up; milk, sugar, and vegetable ghee 1kg prices decreased; whereas only the price of long cloth remained the same.

PBS data showed that for the groups spending up to Rs17,732; Rs17,733-22,888; Rs22,889-29,517; Rs29,518-44,175; and above Rs44,175; WoW SPI went up 4.64 percent, 6.76 percent, 4.55 percent, 3.41 percent, and 0.88 percent respectively. On YoY basis, it increased 26.7 percent, 28.47 percent, 30.35 percent, 31.48 percent, and 31.77 percent respectively.

Among the five quintiles, the highest WoW impact was faced by those spending Rs17,733 to Rs22,888 while the highest YoY impact challenged the group spending above Rs44,175.

PBS compiles SPI via collecting prices of 51 essential items from 50 markets in 17 cities of the country. During the week, out of 51 items, prices of 21 (41.18 percent) items increased, 16 (31.37 percent) items decreased and prices of 14 (27.45 percent) items remained stable.

The PBS attributed the YoY hike in SPI to the increase in prices of onions (177.37 percent), tomatoes (84.17 percent), diesel (74.51 percent), pulse gram (64.73 percent), petrol (62.75 percent), cooking oil 5 litre (55.13 percent), washing soap (54.97 percent), pulse moong (54.19 percent), pulse masoor (52.33 percent), vegetable ghee 2.5kg (52.31 percent), gents sponge chappal (52.21 percent), mustard oil (50.97 percent), pulse mash (50.08 percent) and vegetable ghee 1kg (49.44 percent).