Inflation falls for first time in five months
Trend in coming months depends on prices of petroleum products.
ISLAMABAD:
For the first time in five months, inflation has come down and remained slightly above 14 per cent in January.
The Consumer Price Index (CPI) – a barometer used to monitor changes in prices of 375 goods and services – rose by 14.2 per cent in January 2011 compared with the corresponding month of the previous year, according to a Federal Bureau of Statistics report.
Inflation slipped below 15 per cent for the first time in five months, having previously been on a constant rise because of losses to crops and infrastructure caused by the floods.
A joint report on damage and need assessment by the World Bank and the Asian Development Bank stated that the floods in the country choked the whole supply chain, causing a loss of over $10 billion to the economy.
When the floods hit the country in July 2010, CPI-based inflation was recorded at 12.4 per cent. This rose to 13.3 per cent in August after which it consistently remained above 15 per cent.
According to statistics, the double-digit inflation was due to an abnormal increase in prices of perishable and non-perishable food items. Perishable food item prices surged 44.5 per cent in January, compared with January 2010.
In a span of 12 months, prices of tomatoes increased by 315.8 per cent, fresh milk by 19 per cent, vegetable ghee 35.7 per cent, meat 30.8 per cent and vegetables 35.8 per cent.
On a monthly basis, prices of essential items increased by 1.3 per cent in January compared to December 2010, due to a surge in rates of spices, tomatoes, eggs, vegetable ghee and fresh fruits.
“In January, inflation decreased because of a lower base impact in January 2010,” said State Bank of Pakistan Governor Shahid Hafiz Kardar. He said the continuation of the trend depends on prices of petroleum products in the international market and the government’s decision whether to increase prices locally or not.
In its last monetary policy statement, the State Bank revised its end-year inflation forecast to 16 per cent. However, average inflation during the first seven months of the current financial year remained at 14.6 per cent and the federal government has targeted restricting it to 14.5 per cent by June 30, 2011.
Published in The Express Tribune, February 9th, 2011.
For the first time in five months, inflation has come down and remained slightly above 14 per cent in January.
The Consumer Price Index (CPI) – a barometer used to monitor changes in prices of 375 goods and services – rose by 14.2 per cent in January 2011 compared with the corresponding month of the previous year, according to a Federal Bureau of Statistics report.
Inflation slipped below 15 per cent for the first time in five months, having previously been on a constant rise because of losses to crops and infrastructure caused by the floods.
A joint report on damage and need assessment by the World Bank and the Asian Development Bank stated that the floods in the country choked the whole supply chain, causing a loss of over $10 billion to the economy.
When the floods hit the country in July 2010, CPI-based inflation was recorded at 12.4 per cent. This rose to 13.3 per cent in August after which it consistently remained above 15 per cent.
According to statistics, the double-digit inflation was due to an abnormal increase in prices of perishable and non-perishable food items. Perishable food item prices surged 44.5 per cent in January, compared with January 2010.
In a span of 12 months, prices of tomatoes increased by 315.8 per cent, fresh milk by 19 per cent, vegetable ghee 35.7 per cent, meat 30.8 per cent and vegetables 35.8 per cent.
On a monthly basis, prices of essential items increased by 1.3 per cent in January compared to December 2010, due to a surge in rates of spices, tomatoes, eggs, vegetable ghee and fresh fruits.
“In January, inflation decreased because of a lower base impact in January 2010,” said State Bank of Pakistan Governor Shahid Hafiz Kardar. He said the continuation of the trend depends on prices of petroleum products in the international market and the government’s decision whether to increase prices locally or not.
In its last monetary policy statement, the State Bank revised its end-year inflation forecast to 16 per cent. However, average inflation during the first seven months of the current financial year remained at 14.6 per cent and the federal government has targeted restricting it to 14.5 per cent by June 30, 2011.
Published in The Express Tribune, February 9th, 2011.