Last week, the KSE-100 was expected to rise by over 2,000 points but rose by less than 500 points after the pro-growth budget announcement. This week, it has fallen back to its pre-budget announcement level as the enthusiasm behind the budget fades. Fears of weaker external balance and renewed strength of the US dollar, caused the PKR to lose over a rupee in value. The US dollar is gaining strength off the back of the Fed’s announcement to manage inflation earlier than anticipated. The stronger dollar also led to a selloff in USD denominated commodities such as gold. While international prices of gold fell, they currently remain stable in Pakistan.
The annual change in Sensitive Price Index is down to 14.52% vs. 15.38% last week. This was the first time since mid-March 2021 that change in SPI fell below 15%. On a weekly basis, however, prices rose slightly by 0.28%. Families in the lowest expenditure quintile, spending less than PKR 17,732/month, continued to face the highest burden of inflation.
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