Sensitive Price Index Stays Flat at -0.02% WoW

Pakistan’s Sensitive Price Index (SPI) remained largely unchanged during the week ending 11 September, slipping by just 0.02% on a week-on-week basis, though still showing a 5.03% increase compared to the same period last year.

According to data compiled by the Pakistan Bureau of Statistics and reported by Optimus Capital Management, price changes were mixed across food and non-food categories, with notable spikes in vegetables and declines in staple items.

Among food items, onion prices surged by 12.2% week-on-week, marking the highest increase, followed by tomatoes, which rose by 10.5%. Potatoes also became costlier by 3.6%, while rice IRRI-6/9 increased 1.6%. Other modest rises were observed in eggs (1.5%), sugar (1.3%), and pulse moong (1.3%).

Conversely, wheat flour recorded a steep drop of 9.8%, followed by chicken at 3.2%, bananas at 3.1%, and gur (jaggery) with a minor dip of 0.3%. The sharp fall in wheat flour is particularly significant given its weight in household consumption, providing temporary relief to consumers already grappling with high food inflation.

In the non-food segment, LPG prices rose by 3.1%, driven by global energy trends and local supply factors. Firewood, lawn printed fabric, and shirting all posted marginal increases of 0.2% each, indicating limited inflationary pressures outside the food sector.

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The SPI, which tracks the prices of 51 essential items across different income groups, has remained volatile in recent months. In July, it recorded weekly increases of up to 4%, mainly due to surging vegetable and fuel prices, before stabilizing in August with alternating marginal gains and declines.

On a year-on-year basis, the 5.03% increase reflects a relatively moderate pace compared to double-digit spikes witnessed in 2022 and early 2023, when global commodity shocks and currency depreciation sharply escalated household expenses. Analysts note that while the current stability provides short-term relief, risks remain from seasonal supply disruptions, fuel adjustments, and potential currency pressures.

Historically, September tends to see volatile price movements, especially in perishable food items such as onions and tomatoes, which are currently driving inflationary spikes. In previous years, such increases have often been corrected in subsequent months once supply flows stabilize.

Economists suggest that the decline in wheat flour prices, coupled with moderate year-on-year growth in the SPI, could ease pressure on monetary policy in the near term. However, the persistence of rising utility costs, including LPG, signals that non-food inflation may continue to weigh on households, particularly in lower-income brackets.

Overall, the latest SPI reading underscores a mixed inflationary trend: while essential vegetables are becoming costlier, staple grains and poultry prices are offering some balance, keeping the index flat week-on-week. The coming weeks will determine whether the moderation continues or if seasonal factors push inflation higher once again.