THURSDAY APRIL 07: CPI inflation up by 14.2 percent

ISLAMABAD: The CPI inflation soared by 14.20 percent during July-March period of 2010-11 over the same period of last year, reflecting a strong trend of increase in food prices, according to Federal Bureau of Statistics (FBS). Official figure of Consumer Price Index (CPI), released by the FBS at a news briefing, showed 1.48 percent increase in the monthly inflation in March 2011 over previous month, and 13.16 percent over the same month of last year.
The high inflation, analysts say, may compel the State Bank of Pakistan (SBP) to further tighten the monetary policy, which may have negative impact on growth. An official of the FBS admitted that the strong trend in Wholesale Price Index (WPI) would have impact on the CPI and SPI in the next month.
"WPI is an indictor of future inflation", he said, adding that WPI increase in March 2011 was recorded at 25.41, compared to the same month of last year. The strong trend of increase in the prices of food items, analysts fear, would push more people into below poverty line. An official said that the country has been experiencing most sustained inflationary pressure since January 2008 which still persists and may further increase in coming months.
The inflation was largely driven by the increase in prices of food, transport and communication charges but the cost of recreation, entertainment, cleaning and laundry as well as medical expenses also went up. According to the FBS, Sensitive Price Indicator (SPI) rose by 0.79 percent and WPI by 3.34 percent in March 2011 over previous month.
Food inflation surged by 18.55 percent in July-March 2011 compared to the same month a year ago with cost of non-perishable food items escalating 15.86 percent and perishable 37.05 percent. The cost of medicare went up by 14.29 percent, cleaning, laundry and personal appearance 11.01 percent, textile and footwear by 11.48 percent, household, furniture and equipment 9.68 percent and transport and communication by 14.72 percent.
The main commodities, which showed increase in prices during March, 2011 over February, 2011 were fresh fruits (17.91 percent), eggs (14.58 percent), chicken farm (7.77 percent), potatoes (5.91 percent), vegetables (4.38 percent), tea (3.05 percent), milk fresh (2.80 percent), gram whole (2.71 percent), milk products (2.51 percent), beverages (2.49 percent), spices (2.48 percent), honey (2.28 percent), jam, tomato, pickles & vinegar (2.26 percent), meat (1.97 percent), readymade food (1.51 percent), cereals (1.37 percent), rice (1.11 percent), mustard oil (1.10 percent), condiments (1.06 percent), dry fruits (1.05 percent) and milk powder (0.99 percent).
In apparel textile & footwear, the cost of hosiery went up by 2.67 percent, cotton cloth 2.50 percent, readymade garments 1.90 percent, woollen readymade garments 1.83 percent, silk, linen, woollen/cloth (1.54 percent), and tailoring charges (1.47 percent). The cost of kerosene under the head of fuel & lighting soared by 4.28 percent and firewood 3.45 percent. Under transport & communication heads, the cost of diesel increased by 4.92 percent, petrol 4.90 percent, service charges 2.12 percent and tyre and tube 1.71 percent. The price of stationery went up by 1.72 percent in March 2011 over February 2011.