Weekly inflation touches the sky, hitting a 14 year high

[Zibago]

Weekly inflation touches the sky, hitting a 14 year high​

Increase in price of petrol and diesel results in all time high weekly inflation based on the SPI
By News Desk

18 June 2022
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One after another increase in price of petrol and diesel with a motive to satisfy the IMF conditions has resulted in weekly inflation touching the sky as it surged to 3.38 per cent week-on-week and 27.82 per cent year-on-year hitting a 14-year high during the week ended June 16, based on the sensitive price index (SPI).
Read more: Pakistan’s inflation reaches an all time high

As per data issued by the Pakistan Bureau of Statistics (PBS), prices of 71% of the basket of goods in SPI increased. The list of goods that observed increasing prices is extracted from the PBS data and is given below:

• Diesel —28.9%,
• Gents sponge chappal — 26.76%,
• Gents sandal — 15.40%,
• Chicken — 12.10%,
• Petrol —11.43%,
• Potatoes — 6.89%,
• Electricity charges for Q1 — 6.63%,
• Cigarettes — 6.27%,
• Cooked daal — 5.90%,
• Pulse gram — 5.29%,
• Cooked beef — 5.19%

It is important to highlight that the combined effect of the increase in prices of these goods was 2.53% in total SPI for the group.
Previously in May, the inflation rate based on the Consumer Price Index (CPI) reached 13.8% on a year-on-year basis which was the highest since January 2020 — due to a surge in prices of non-perishable food items.
As quoted by the Geo News, Ismail Iqbal Securities Head of Research Fahad Rauf in his note stated, “Based on current numbers, we expect June 2022 CPI at 17.6%.” He pointed out that the removal of subsidy on electricity announced under the prime minister’s package was not yet incorporated in SPI readings. “If removal is incorporated, CPI would reach 19% year-on-year.”
Considering the rapid increase in fuel prices, national price monitoring agency shared that hi-speed diesel (HSD) now remains at Rs264.17 per liter, up from Rs204.93per liter last week, and Rs113.57 per liter during the same period last year.
In the meantime, petrol remains at Rs234.71 per liter, up from Rs210.63 per liter last week, and Rs111.68 per liter last year.

Since the imported government came into power, diesel price has risen by 82%, with petrol price up by 56%. During the week ended April 7, 2022, only three days prior to former prime minister Imran Khan lost the vote of no confidence, petrol was Rs150.63 and diesel was Rs144.9.
In the SPI basket, petrol weightage stands at 6.7%, while hi-speed diesel stands at 0.087% for the combined group. Stagnant wages and rapid increase in fuel prices has over-burdened the masses, especially low- and middle-income earners.
Consequently, citizens are protesting in Karachi and attacked a petrol pump near Purani Sabzi Mandi in Central District over the non-supply of petrol. Also, citizens in Larkana protested due to the increase in petrol price. The outraged citizens set fire to tires at Jinnah Bagh Chowk in Larkana according to ARY News.
It is important to mention that SPI is calculated on weekly basis to assess the price variations of essential goods at a shorter time interval to analyze the situation of prices in the country. The basket of goods for SPI consists of 51 essential items and the prices are collected from 50 markets in 17 cities of the country.
During the week, out of 51 goods, prices of 36 (70.59%) items increased, six (11.76%) items decreased, and nine (17.65%) items remained stable.

Weekly inflation touches the sky, hitting a 14 year high

Increase in price of petrol and diesel results in all time high weekly inflation based on the Sensitive Price Index (SPI)

www.globalvillagespace.com

 

[Crimson Blue]

I am afraid this is just the beginning.
If foreign reserves dip below $5 billion, and Sharif/Zardari regime does get a bailout package, then we are looking at 40% - 50% annual inflation.

 

[maithil]

Genie of inflation ready to devour all​

ISLAMABAD:
Abdul Waheed, who lives on the outskirts of Islamabad, has spent years working two jobs to support his family living back in his village in Khyber-Pakhtunkhwa. Now a 46-year-old, he feels that even two jobs are not enough as he is facing difficulties in sending monthly ration to his family amid the runaway inflation.

He said he was finding it extremely difficult to afford fuel for his motorcycle, which had jumped from roughly Rs2,500 per month to almost Rs5,000.

Measuring inflation through the lens of essential items like cooking oil, he recalled, five litres of cooking oil would cost Rs850 in 2018; then it was available for Rs1,950 before the PML-N came to power and three days ago, it was being sold for Rs2,750.

Waheed is not alone as a large chunk of the country’s population is dealing with inflation every day when they buy groceries or fuel and pay more for just about everything.

The soaring inflation is painful and inescapable for the people. On Friday, the Pakistan Bureau of Statistics (PBS)’s Sensitive Price Indicator (SPI) put a stamp on what the common man has been feeling. The SPI for the week that ended on June 16 recorded an increase of 3.38%.

The PBS also disclosed that the year-on-year trend depicted an increase of 27.82% in inflation.

Apart from the ordinary people, the spiralling inflation has simultaneously become a nightmare for the successive governments that have failed to control it.

Even the State Bank of Pakistan (SBP), which was recently tasked to control inflation, could not ease the misery of the common man.

“The pain would be eased as soon as external account is stabilised, reserves stop decreasing and the exchange rate is steady,” eminent economist Dr Waqar Masood said.

Dr Masood, who has served as the federal secretary for finance division as well as SAPM on finance and revenue, said inflation was a global phenomenon. He added that the country’s energy prices were all based on imports and leading inflationary pressures.

“All these steps have been taken for the revival of IMF [International Monetary Fund] programme to curb the rot gripping the economy.”

Financial analyst Dr Farrukh Saleem listed two reasons for the inflation: First, the increase in oil prices in the international market and secondly, Pakistan’s reliance on imported oil.

“The prices of vegetables, meat and everything else increases because the country imports 90% of its oil.”
Dr Saleem described the situation as a double-edged sword, adding that it seemed difficult to escape it. He pointed out that increasing income was a solution but Pakistan will simultaneously have to keep the IMF happy.

The IMF, reportedly, not only wants a reversal of cut in the income tax rates for the salaried-class people but is seeking to pass on an additional burden of Rs125 billion on them.

Dr Saleem did not find it appropriate to put the entire blame on the central bank, saying the SBP only used monetary instruments to control inflation and could increase interest rate at the most.

“Pakistan is the only country buying expensive oil and selling it cheap,” he said, adding that this practice could have led to default.

“However, that has been averted,” he said, explaining that the investors’ wisdom changed by May 27 as they started buying Pakistan’s international bonds and that averted the potentially disastrous default.

The incumbent government, while being in the opposition just a few months ago, had frequently criticised the PTI-led government and vowed to turn things around after coming to power -- a promise that it had failed to live up to.

Taking stock of the situation, PTI chairman and deposed premier Imran Khan lambasted the coalition government and invited the nation to take to streets and hold peaceful demonstrations on Sunday against inflation.

Imran, while calling the government incapable of handling the economy, warned that inflation would soar even higher in days to come if the nation kept sitting idly.

In a statement, PTI Central Secretary General Asad Umar also lashed out at the government for plunging the country into the quagmire of problems, saying its incompetence and flawed policies had created the “worst-ever” problems for Pakistan as its foreign reserves were fast depleting and rupee was losing its value at an alarming pace.

The PTI secretary general warned that the massive surge in the fuel prices would trigger a storm of inflation, which would further compound the miseries and hardship of the people.

He said the abysmal performance of the incumbent government could be judged from the fact that SBP foreign exchange reserves had fallen below $9 billion with a fall of another $240 million last week.

Among other things, Umar asked: “Who is going to take responsibility?”, fearing the power tariff would further increase due to the expensive energy plants running on imported fuel oil, which could further push the inflation upwards.

To overcome the nightmare of inflation, the government is largely hoping that financial help would arrive from IMF and friendly countries, and the Russia-Ukraine war would get over soon. Apart from pinning hopes on others, the only other thing that the government is doing at the moment is to urge public to adopt austerity measures while it is on a streak of increasing petroleum prices.

Federal Minister for Information Marriyum Aurangzeb was asked for comments but they did not come till the filing of this story.

Genie of inflation ready to devour all | The Express Tribune

People’s everyday lives being affected by increasing prices

tribune.com.pk

 

[lastofthepatriots]

 

[SoulSpokesman]

A serious question for all posters here. Pak's petrol prices still seem around 10% lower than India in dollar terms, the prices of food stuff in dollar terms seem to be more or less at par. The per capita income in both countries is similar and the distribution of income is apparently better in Pak. And yet there seems to be much more protests in Pak than in India.

Is it that Pakistanis are more sensitive? Or are us Hindoos excessively docile? Or am I missing something?

@Joe Shearer @niaz @Indus Pakistan @Jango @Vapnope @waz @Chak Bamu @313ghazi

Regards

 

[Indus Pakistan]

Is it that Pakistanis are more sensitive?

It's not question of being sensitive. This is more about what they are used to. In so many ways Pakistani's are spoiled and used to living at better standards then the actual work they produce. The fact is fuel has been subsidised for a long time and has always been far cheaper then other South Asian countries.

Basically Pakistani public have lived above their real means for a long time. The 'butter' has been provided by -

• 
  
• pawning Pakistan's strategic location for $$$$. Recent example is Musharaf selling Afgan franchise for billions.
• 
  
• recieving loans/grants again mostly on back of strategic sales.
• 
  
• massive % of Pak labour exported abroad who then send billions in remittances. To give you a idea the entire business class and so called industry in all of Pakistan's hubs earns less dollars then remittances.

This has been actual Pakistani business model. We sell our strategic estate, sell our labour abroad - mostly to West and GCC. That is why Pakistan has no TATA, no Birla, no Reliance. Nothing.

 

[SoulSpokesman]

@Indus Pakistan

Kaptaan sb,

Thanks. That seems a plausible and logical explanation.

massive % of Pak labour exported abroad who then send billions in remittances.

This in my opinion is a bona fide economic model unlike the other two you mentioned.

Regards

 

[Indus Pakistan]

This in my opinion is a bona fide economic model unlike the other two you mentioned.

I used to think the same and in fact took pride in it. But, recently I have changed my perspective on it. Labour export might provide short term benefits but over the long term it is toxic in Pakistan's evolution.

The problem is by sending labour abroad it avoids the neccessity of change within society. In other words it retards social progress. A man exported abroad can retain his primitive thinking but still earn good dollars. This effectively gives blood transfusion to all the negative strain in Pakistani society.

I use the Bangla example. We send one young man abroad. He retains his primitive thinking. His dollars then go back home to perpetuate that primitive thinking. By comparison Bangladesh developed RMG industry.

This meant millions of Banglas become connected to the global trading order. Millions of females got employed. The entire RMD industry forced a change in culture as females worked in a formal setting and this fed into a better educated female who then would have better educated children with a more open minds. Meaning RMG industry has brought about huge social revolution as well as providing economic benefits.

Exporting labout short circuits this entire social evoloution process.

 

[SIPRA]

Thanks to Mir Bajwa and his cronies.

 

[ziaulislam]

 

[ghazi52]

.,..,

 

[SoulSpokesman]

@Indus Pakistan

Kaptaan sb,

Wow! That was an amazing post. Sometimes a single post is as lucid as a well thesis in explaining a society.

Regards

 

[Zibago]

A serious question for all posters here. Pak's petrol prices still seem around 10% lower than India in dollar terms, the prices of food stuff in dollar terms seem to be more or less at par. The per capita income in both countries is similar and the distribution of income is apparently better in Pak. And yet there seems to be much more protests in Pak than in India.

Is it that Pakistanis are more sensitive? Or are us Hindoos excessively docile? Or am I missing something?

@Joe Shearer @niaz @Indus Pakistan @Jango @Vapnope @waz @Chak Bamu @313ghazi

Regards

The swings in Pakistan are enormous also in Pakistan commodities that are determined by international players have been politicized hence constant conflict

 

[Path-Finder]

 

[ghazi52]

.,.,

https://twitter.com/x/status/1535987948025438210