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November 23, 2019
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Business Pakistan

Inflation shot up to 8.2 percent in June: PBS

ISLAMABAD: Monthly inflation has arisen to 8.22 per cent in June, according to data compiled by the Pakistan Bureau of Statistics (PBS).

The inflation rate crossed government’s annual target of 8pc for 2013-14 compared to 7.38pc in 2012-13. It rose mainly due to increase in prices of food items, especially vegetables.

On month-on-month basis, an increase of 0.6pc was witnessed in the inflation measured through Consumer Price Index (CPI) in June 2014 from the previous month of May.

The PBS figures showed that inflation measured through Sensitive Price Index (SPI) stood at 6.2pc in June. The prices of wholesale manufactured products also increased 7.7pc over the same month last year.

The average inflation rate during the year 2013-14 increased by 8.62 percent over the same period of last year.

To rein in inflation, the government has imposed 25pc regulatory duty on export of potato and withdrew customs duty, sales tax and withholding tax at import stage. However, the move did not help stabilise the price of potatoes in domestic market.

Core inflation, which is non-food and non-energy inflation, stood at 7.9pc in the month under review, rising by 0.4pc from the previous month. Core inflation plays an important role in fluctuation of inflation rate.

The government borrowing is one of the key factors, influencing the trend in inflation. The present government’s low level of borrowing at 15.7pc during July-April against 29pc borrowing over the same period last year resulted in the decline of core inflation to 7.9pc during the period under review.

The food inflation stood at 7.4pc in June. It is mainly driven by non-perishable products, which witnessed an increase of 11.09pc during the month under review.

The food items that witnessed increase in the prices during June 2014 from the previous month included tomatoes 60.22pc, mash 3.61pc, sugar 3.44pc, potatoes 3.26pc, spices 2.79pc, beverages 2.55pc, milk powder 2.36pc, gur 2.03pc, moong 1.98pc, eggs 1.64pc, milk products 1.58pc, condiments 1.56pc and milk fresh 1.43pc.

Non-food inflation stood at 8.9pc during the month under review. The non-food items that witnessed increase during the month included household servant 2.52pc, cotton cloth 2.22pc, marriage hall charges 1.46pc, education 1.15pc, sewing needle and dry cell 1.12pc, hosiery 1.07pc, mechanical services 0.96pc and tailoring 0.92pc.

An official report of the finance ministry said the one percentage point increase in inflation can be attributed to many factors, but domestic food prices were major stimulants to drive the headline inflation.

The increase in food items prices was on account of demand/supply fundamentals owing to cyclical condition and also increase in prices of import items due to global increase.