In Pakistan, the prices of essential items have witnessed a more rapid increase for lower income groups earning up to Rs8,000 per month in comparison to other income segments.
This concerning trend was revealed in the Sensitive Price Indicator (SPI) for the week ending January 10, 2019, indicating that inflation is disproportionately affecting the most economically vulnerable.
According to the SPI data, the inflation rate for the lower-income group earning up to Rs8,000 per month surged by 0.51 percent. While this group experienced the most significant inflationary pressure, other income groups were also affected, albeit to a lesser extent, with the following increases: up to Rs12,000 (0.47 percent), up to Rs18,000 (0.45 percent), up to Rs35,000 (0.41 percent), and those earning above Rs35,000 saw a 0.34 percent rise in inflation.
Furthermore, the combined inflation rate for all income groups increased by 0.4 percent on a weekly basis when compared to the period ending January 3, 2019. This inflationary surge underscores the challenges faced by citizens across different income brackets as the cost of essential items continues to rise.
The SPI, calculated based on a 2007-08=100 base, covers 17 urban centers and includes data on the prices of 53 essential items, providing insight into the cost of living for various income groups or quintiles and the overall population. This data is critical for policymakers and economists to gauge the impact of inflation on different segments of the society and formulate strategies to mitigate its effects.
The data reinforces concerns about the inflationary pressures facing the country, particularly among the lower-income groups. Rising prices for essential items, such as food, fuel, and utilities, can significantly erode the purchasing power of those with limited financial means, pushing them further into economic hardship.
Economic disparities and inflationary trends have been a topic of discussion in Pakistan’s policy circles, with increasing calls for targeted interventions and social safety nets to protect vulnerable populations from the adverse effects of inflation. The government, in collaboration with relevant authorities, has been urged to implement policies that help curb inflation and ensure that essential items remain affordable for all citizens.
The rise in inflation comes at a time when many economies globally are grappling with increasing costs, driven by factors such as supply chain disruptions, rising energy prices, and changing global economic dynamics. To address this challenge, Pakistan may need to adopt a multi-pronged approach, including monetary policy adjustments and fiscal measures to support those most affected by inflation.
It is imperative that economic policies and social safety nets are designed to protect the most vulnerable segments of the population, ensuring that they have access to affordable essentials even in the face of rising inflation. Achieving this balance will be crucial to fostering economic stability and equitable growth in Pakistan.
