Cause célèbre?: Govt meets inflation target, say Statistics officials

Claim inflation restricted to 11%; prices continue uptick in June.

ISLAMABAD:

The government has finally achieved at least one key target: it has managed, more or less, to restrict inflation during the recently-concluded fiscal year to 11%.

Reduction in prices of staple commodities and a recent decline in oil prices has helped restrict inflation during the last fiscal year (June-July) 2011-12 to 11.01%, Sohail Ahmad, Secretary Statistics, has said while announcing figures for the nation’s most closely-watched indicator – the Consumer Price Index – here on Monday.

For the last fiscal year, the government had set a 12% target for inflation. It is the only key target that has been achieved. Meanwhile, the government missed its targets for economic growth, budget deficit between expenses and receipts, current account deficit between external payments and receipts, and the tax collection target. Above all, it spent roughly Rs425 billion beyond the approved budget by the parliament, indicating weak fiscal management.

Core inflation – which is a measure of non-food, non-energy inflation, and is considered an important litmus test for inflationary trends – remained at 11.4% over the last fiscal year.

Munir Aslam, newly-appointed Director General Statistics, said that double-digit inflation in the groups of clothing, footwear, health, transport, education and restaurants was the real cause of concern.

During the last fiscal year, a 30.5% increase was witnessed in motor vehicle taxation; the cost of keeping household servants rose 28.4%; whole gram prices increased 28.3%; spices 28%; firewood 26.8%; fresh fruits 25.6%; and personal equipments 24.4%.

The prices of medical equipments also increased 24%; kerosene oil 23.2%; condiments 22.8%; woolen cloth 22.8%; motor fuel 22.8%; and gas became more costly by 20.4% while nuts prices soared by a fifth, according to official statistics.

Monthly inflation

Ahmad said that in June – the last month of fiscal 2012 – the inflation rose to 11.3% as compared to the same month of the previous year. The increase was due to a rise in prices in all groups, say officials. The prices of food and non-alcoholic groups rose by almost 10%; perishable food items’ rates increased 11.7%; clothing and footwear 18.7%; housing water, electricity, gas and other fuels group’s rates soared 10.8%; furnishing and households 22.3%; and healthcare costs increased 14.3%.

Published in The Express Tribune, July 3^rd, 2012.