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BR Research

Have prices really gone up in Ramazan?

Published September 4, 2009 Updated September 4, 2009 12:00am

Every Ramazan our media, both electronic and print, like to focus extensively on how much the public suffers from the price hike of essential commodities in the holy month. Official statistics, however, differ greatly from wide-spread suffering portrayed by popular media.
Weekly price index, the SPI, measured by the Federal Bureau of Statistics shows that the prices of essential commodities (mainly food) for lowest income group declined by 0.1 percent, during the third and fourth week of August 2009, while on a monthly basis, it increased by 1.7 percent in August versus 2.7 percent increase in the preceding month.
Taking a look at inflation numbers in and around Ramazan for the last four years, one cant help notice that Ramazan price phobia is perhaps not justified. So, what is behind this popular belief that the prices of food items abnormally surge during the holy month? Data and simple economic logic are entirely different from popular opinion.
In Ramazan, most people usually take two meals a day rather than three. The consumption of meat, pulses, rice and vegetables is partially but significantly substituted by fruits, dairy products and deep fried junk food. Hence, there is a case of a decline in price growth of the former and an increase in that of the latter.
The data supports this argument as well; the prices of sugar, chicken, rice, pulses and mutton fell in first week of Ramazan, whereas banana, garlic, potatoes, gur and milk prices surged. But the general perception is that the monthly food budget of an average household increases in Ramazan. The fact of the matter is that people simply consume less nutritious food while loading up on expensive food items like samossas, chatni cha`at, kebab rolls, etc.
So we come to a long standing problem: is the media creating a façade, a populist agenda, by ranting about price increases in Ramazan, or is it a case of inefficient documentation by the government body? Since, most believe what they see; chances are the media is correctly mirroring the economic picture of society.

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