KARACHI:
The Sensitive Price Index (SPI) for the week ended August 28, 2025, rose by 0.62% week-on-week (WoW) and 3.57% year-on-year (YoY), marking the highest YoY increase after 33 weeks.
The uptick was driven primarily by higher food prices, with tomatoes, wheat flour, chicken, potatoes, and mustard oil recording the sharpest increases.
“Pakistan’s Weekly SPI for the period ending Aug 28, 2025, increased by 0.62% WoW while up 3.6% YoY, which is the highest YoY after 33 weeks,” noted Topline Securities.
“YoY is the highest since January 2, 2025,” according to Arif Habib Limited (AHL).
The weekly uptick was largely driven by notable price hikes in essential food and household items. Tomatoes recorded the sharpest weekly surge of 14.98%, followed by wheat flour at 12.11%, chicken at 3.36%, potatoes at 1.52%, mustard oil at 1.37%, and eggs at 1.03%. Prices of LPG and cooked beef also rose by 0.82% and 0.81%, respectively, while garlic edged up 0.78%. Among non-food items, lawn printed fabric, firewood, and long cloth saw marginal increases of 0.23%, 0.17%, and 0.11%, respectively.
Conversely, a decline was noted in the prices of a few commodities. Pulse Mash fell by 0.43%, while both pulse masoor and pulse gram dropped by 0.28% each. Bananas edged down by 0.12%, vegetable ghee (2.5 kg) by 0.10%, and onions by 0.01%. Out of the 51 items tracked, prices of 18 items (35.29%) increased, six items (11.76%) declined, and 27 items (52.95%) remained unchanged during the week.
On a YoY basis, the SPI showed an overall increase of 3.57%. The steepest annual rise was seen in the prices of ladies’ sandals, which surged by 55.62%, followed by gas charges for Q1 (29.85%) and sugar (26.91%). Beef and gur recorded increases of 12.99% and 12.18%, respectively, while bananas (11.78%), pulse moong (11.74%), firewood (11.47%), vegetable ghee (2.5 kg) (11.36%), vegetable ghee (1 kg) (10.89%), cooked beef (8.93%), and lawn printed fabric (7.64%) also contributed to the upward pressure on the index.
At the same time, significant YoY declines were observed in the prices of onions (49.31%), garlic (25.98%), pulse mash (23.39%), potatoes (19.96%), and pulse gram (18.54%). Electricity charges for Q1 fell by 18.12%, tea (Lipton) by 17.93%, pulse masoor by 7.05%, rice IRRI-6/9 by 5.47%, and LPG by 3.70%.
Headline inflation for August 2025 is projected at around 4.1%, unchanged from the previous month but significantly lower than 9.6% recorded in the same period last year, according to Insight Securities. On a month-on-month basis, inflation edged up by 0.4%, mainly due to higher food prices, particularly tomatoes, onions, eggs, fresh vegetables, and wheat. This pressure, however, was partially offset by declines in electricity charges, LPG, fresh fruits, potatoes, pulses, and sugar.
Given these dynamics, analysts expect the State Bank of Pakistan to maintain the policy rate at its current level in the upcoming Monetary Policy Committee meeting. They argue that the full impact of the cumulative 1,100bps rate cuts is still unfolding, while the real economy is in a gradual recovery phase after prolonged inflationary and currency pressures. However, recent flooding in Punjab and Khyber-Pakhtunkhwa poses fresh risks to agriculture and supply chains, warranting caution in policy decisions.
