YoY headline inflation jumps to 11.05 percent in February

The headline inflation jumped to 11.05 per cent in February 2012 over the same period of last year on the back of spiralling food and energy prices, according to the Pakistan Bureau of Statistics (PBS). The average inflation during July-February 2011-12 over the same period last year swelled to 10.79 per cent and inflation in February witnessed an increase of 0.30 percent over the previous month.
The rise in inflation was against expectations of the economic managers who had been hoping that a respite in inflation witnessed during last couple of months may continue for the remaining months of the current fiscal year to enable them to achieve the budgetary target of 12 per cent.
Analysts maintain that the surging energy cost - electricity, petroleum products and CNG - as well as depreciation of the rupee against all the major currencies is going to further erode the purchasing power of the people and inflation may end up much higher than the target for the current fiscal year. The impact of wheat support price - raised from Rs 950 to Rs 1050 per maund by the government - and deficit financing due to higher than anticipated borrowing domestically due to the improbability of materialisation of the external inflows budgeted for the current fiscal year is expected to translate into higher inflation in the last quarter of the current fiscal year. According to analysts spill-over impacts of inflation would have serious repercussion on the economy and the government should focus on addressing structural issues in the economy that are contributing to inflation.
The commodities which contributed to month-on-month percentage changes in inflation included price of chicken which surged by (3.32%) in the month of February 2012 over January 2012, condiments (3.11%), fish (2.75%), nimco (2.56%), beans (2.44%), readymade Food (1.94%), honey (1.69%), dry fruits (1.46%), cereals (1.37%), tea (1.17%), besan (1.14%) and bakery & confectionery (1.12%).
Motor fuel price increased by (7.26%) in February 2012 over the previous month , motor vehicle tax (5.73%), firewood whole (5.55%), woollen readymade garments (5.07%), kerosene Oil (3.71%), mechanical service (3.40%) and personal equipments (3.36%). Analysis of the data showed that the prices of food & non alcoholic beverages escalated by 10.58% in February 2012, non-perishable food items 9.60%, perishable food items 17.09%, alcoholic beverages & tobacco 6.50%, clothing & footwear 14.98%, housing water, Electricity, gas & other fuels increase 7.72%.
The cost of furnishing & household equipment maintenance soared by 21.29% during the period under review, health cost increased by11.41%, transport 18.80%, recreation & culture 6%, education 11.93%, restaurant & hotel 11.48% and cost of miscellaneous goods & services went up by 21.73%.
Average inflation rate during July-February 2011-12 was 10.79 per cent as compared to the same period of last year with food & non alcoholic beverages inflation at 11.35%. Non-perishable food items during the period increased by 12.97% and perishable food items 3.09%.
The cost of alcoholic beverages & tobacco increased by 6.95%, clothing & footwear 14.68%, housing water, electricity gas & other fuels 7.43%, furnishing & household equipment maintenance by 16.78%, health increase 10.93%. The cost of transport increased by 14.50%, communication 0.87%, recreation & culture 5.42%, education 12.26%, restaurant & hotel 14.41% and cost of miscellaneous goods & services increased by 20.13% during the first seven months of the current fiscal year over the same period of last year, according to official figures.