ISLAMABAD: Inflation measured by the Sensitive Price Index (SPI) fell 0.26 per cent in the week ended May 26 owing to a drop in the prices of a few essential food items, according to Pakistan Bureau of Statistics (PBS) data released on Friday.

The drop was noted after four weeks of consecutive increases. Last week, the SPI saw the second-biggest increase in weekly prices since April 2022, when the SPI jumped 1.53pc.

Data shows that the prices of five essential food items decreased during the week under review compared to the previous week.

The price of food items wheat flour 12.25pc, chilies powdered 6.48pc, chicken 4.41pc and garlic 2.99pc while in non-food item the price of LPG declined by 0.43pc

The SPI declined by 0.38pc for the lowest income group (i.e. people earning below Rs17,732 per month) and by 0.15pc for the group with a monthly income of above Rs44,175.

Of the 51 items whose prices were surveyed by the PBS, the prices of 27 items increased, those of five items decreased, and the prices of 19 items remained constant.

According to the Ministry of Finance’s Monthly Economic Update & Outlook for April, the overall spike in CPI is on account of an increase in the prices of imported items, as the country is a net importer of such items, especially crude oil, pulses and edible oil, which ultimately reflects in domestic prices. The Ukraine war, supply chain disruption, and global demand recovery all contribute to price increases.

It further said that high international commodity prices not only keep inflation elevated, but are also a burden on Pakistan’s external account and hence on its foreign exchange reserves.

Published in Dawn, May 28th, 2022