Authorities were expecting inflation to be over 14 per cent in May. Inflation in April was recorded at 13.3 per cent, said the Federal Bureau of Statistics (FBS) on Friday.
The government last month reduced petroleum product prices by over seven per cent which helped ease inflation. Supply of perishable food items also improved, which restricted an increase in prices of onion, tomato, wheat, chicken and vegetable.
“Inflation figures are amazing and against government expectations,” said an official of the Statistics Division.
Average inflation by the end of this fiscal year on June 30 may now be around 11.5 per cent against government’s revised estimate of 12 per cent, he said.
FBS data showed that prices of goods and services increased by 11.7 per cent during July-May of the current fiscal year compared to the same period last year. Average inflation in the first 11 months of last year was 21.6 per cent.
When compared to the previous month, inflation marginally rose by 0.06 per cent in May. It was a positive trend as for the first time in five months, the price rise has eased to almost half a percentage point. Over the past few months, the increase had been above one per cent on monthly basis.
Food and beverage prices, which carry a 40 per cent weight in the commodities’ group, increased by 14.8 per cent in May over the same month last year, showed the FBS data. However, there was a 0.04 per cent fall in prices of perishable food items on monthly basis due to removal of bottlenecks in the supply chain.
In the food and beverage group, potato prices increased by 23 per cent while egg prices surged 12 per cent.
House rent, which has a 25 per cent weight in the commodities’ group, soared 10.5 per cent.
Prices of fuel and lighting increased by 15.9 per cent while transportation and communication rates rose by 18.7 per cent in May on year-on-year basis. However, both groups showed a negative trend on monthly basis.
The government admitted in the Economic Survey of Pakistan that during this year it could not do much to control inflation because of rising prices of food and fuel.
Finance ministry officials have proposed to the government that the revival of the price magistracy system can also be an effective tool in the fight against inflation.
Published in the Express Tribune, June 12th, 2010.
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