Weekly inflation, measured through the Sensitive Price Indicator (SPI), reached an eight-month high at 44.64% in the week ended Thursday, driven by the increased prices of energy and food products compared to the same week last year. Wheat Flour (20kg bag) saw a 65.03% increase, reaching Rs2,811.833 for the week compared to the same period last year. Despite the persistently high interest rate implemented by the SBP to discourage non-essential purchases, administrative measures, such as government-approved increases in gas prices, have offset the impact, significantly contributing to the inflation surge in the country. The benchmark monthly inflation reading, measured through the Consumer Price Index (CPI), reached a three-month high at 29.9% in December 2023. However, a subsequent deceleration is anticipated, potentially allowing the central bank to reduce the interest rate, fostering moderate economic activities in FY24.

Source: The Express Tribune January 20, 2024 15:51 UTC