KARACHI: Pakistan’s weekly inflation dropped to a 27-month low of 16.69% for the week ending August 21, 2024, as the rise in food prices eased compared to the same period last year.
During this week, prices of essential items such as eggs, gram pulse, potatoes, cooked daal, cooked beef, mustard oil, beef, shirting, fresh milk, and liquefied petroleum gas increased by up to 6.10%.
The slowdown in short-term inflation and projections for continued easing in the benchmark Consumer Price Index (CPI) has fueled speculation that the State Bank of Pakistan (SBP) may reduce its key policy rate for the third consecutive time in the upcoming monetary policy review on September 12. Analysts expect a potential rate cut of 1 to 1.5 percentage points, following the cumulative 2.5 percentage point reduction in June and July, bringing the current rate down to 19.5%.
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The Sensitive Price Indicator (SPI), which tracks the prices of 51 essential items across 50 markets in 17 cities, showed that during the week ended August 21, 2024, prices of 21 items (41.18%) increased, nine items (17.64%) decreased, and 21 items (41.18%) remained unchanged compared to the previous week.
The year-on-year increase of 16.69% in the SPI was primarily driven by a 570% surge in Q1 gas charges, followed by a 79.51% rise in onion prices. Other goods, including gram pulse, tomatoes, milk powder, gents’ sandals, beef, moong pulse, shirting, garlic, salt powder, and georgette, saw price increases of up to 51.34%.
