The government’s claim of reining in inflation has proved short-lived as latest statistics show that inflation in May rose by 12.3%, indicating price pressure will stay in the new financial year too.
Inflation, measured by the Consumer Price Index – the most closely watched indicator, is the highest in 10 months and close to the July 2011 figure of 12.4%, showed data released by Pakistan Bureau of Statistics (PBS) on Friday. Inflation in April was recorded at 11.27%.
While launching outgoing fiscal year’s Economic Survey on Thursday, Finance Minister Dr Abdul Hafeez Shaikh declared victory over inflation, saying the government managed to restrict price rise to below 11% in nine months due to reduction in state expenses and tight monetary policy.
According to the survey, the government is focusing on restricting inflation to 12% in the current fiscal year ending June 30. It said the trend of first 10 months suggested that “inflation has been stabilised on account of tight monetary policy and declining global commodity prices.” While forecasting for next fiscal year, the survey stated that “inflation is likely to further decelerate gradually over the few months.” For the next year, the government has set 9.5% inflation target.
Non-food non-energy inflation, commonly known as core inflation, also remained in double digits in May at 11.1% compared to 9.7% in May 2011.
In the month, motor vehicle tax was increased by 48% over a year ago, textbook prices soared 42%, household servant charges rose by 39%, gas prices went up by 29.4%, firewood prices increased by 26% and motor fuel prices jumped by 24.4%.
Average inflation in 11 months (July to May) of the fiscal year stood at 11%. Month-on-month inflation (compared to April) rose 1.1% in May as electricity prices swelled by 16.4%.
Published in The Express Tribune, June 2nd, 2012.
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How can inflation go down when the government continues to print and spend money?! When the fiscal deficit is twice the budgeted amount it makes the budget look like a joke. Who wants to bet that they will exceed the budgeted fiscal deficit in 2012-2013 as well?
There is nothing to be happy about; inflation remains in double-digits and policies are still too loose.