Iraq core inflation 7.1pc in July

BAGHDAD: Iraq's core annual inflation rate quickened to 7.1 percent in July from 6.4 percent in June, driven mainly by higher housing rental prices and an increase in the cost of building materials, a central bank official said on Thursday.

Deputy Governor Mudher Kasim told Reuters the slow response by government in addressing Iraq's chronic housing shortage had continued to push prices up.

"60 percent of Baghdad families do not own houses," Kasim said.

Iraq faces an acute shortage of houses after years of war and sanctions and needs between 2-3 million new homes for its growing population, officials have said.

The housing shortage is a pressing demand for Iraqis and progress on the ground to address the problem has been slow, mainly due to a lack of finance.

The government hopes a sharp fall in violence from the sectarian strife in 2006-07, and a new investment law allowing foreigners to own land for housing projects, will help entice foreign investors.

Copyright Reuters, 2011