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ISLAMABAD: Inflation edged to a 17-month high in September on the back of high food prices owing to the recent devastating floods, which damaged crops and disrupted food supply chain, official data compiled by the Federal Bureau of Statistics showed on Monday.
Driven by food and fuel prices, the headline inflation, which is based on consumer price index, rose to 15.71pc in September from 13.23pc in August indicating an impact of floods on food prices.
Aside from the higher food needs, there will also be additional demand for building materials, medicines, and social services when the reconstruction activities kick off, which may also contribute to price pressures.
Analysts said the inflation will remain on the higher side for the next several months owing to increase in domestic oil, and upward revision of electricity tariffs. The pace of price rises, particularly of wheat, sugar, will also accelerate in the coming months.
At the same time, the annual inflation in the first quarter this year also climbed to 13.77 per cent compared with 10.66 per cent over the corresponding period last year.
The government has initially projected a target of 9.5 per cent for inflation for the year ending on June 30, 2011. However, it recently informed the IMF that countrys inflation target would escalate between 11.7 per cent to over 13 per cent following the floods hit the crops and damaged the infrastructure. The IMF has forecast Pakistans annual inflation at 13.5 per cent.
Officials in the finance ministry linked the hike in inflation with continued pressure on food prices, fiscal pressure due to security situation, adjustment in utility prices, increase in transport charges, continued depreciation of rupee, which pushed upward cost of imported raw materials, goods and services, high mark-up rate and loss in productivity due to power shortages.
Figures released here showed that food inflation increased to 21.24pc in September over the last year month. Prices of non-perishable food items witnessed a surge of 16.04 per cent and that of perishable items 53.86 per cent. Prices of industrial goods have also recorded a tremendous increase during the month under review, belying the argument that the rise is seasonal.
The food items, which registered increase during the period under review, include onions, tomatoes, potatoes, chicken, sugar, pulse moong, wheat flour, dry fruits, cereals, pulses, and cooked food.
The non-food and non-energy core inflation dipped to 9.4 per cent in September from 11.9 per cent last year on account of increase in benchmark interest rate by State Bank for the second time in two months to tame inflation.
However, the house rent index rose by 7.62 per cent and medical care cost by 12.47 per cent in September over the same month last year. The transportation fare increased by 15.5 per cent during the month under review over the same month last year.
DAWN.COM | Business | Inflation up 15.7pc on high food prices
Driven by food and fuel prices, the headline inflation, which is based on consumer price index, rose to 15.71pc in September from 13.23pc in August indicating an impact of floods on food prices.
Aside from the higher food needs, there will also be additional demand for building materials, medicines, and social services when the reconstruction activities kick off, which may also contribute to price pressures.
Analysts said the inflation will remain on the higher side for the next several months owing to increase in domestic oil, and upward revision of electricity tariffs. The pace of price rises, particularly of wheat, sugar, will also accelerate in the coming months.
At the same time, the annual inflation in the first quarter this year also climbed to 13.77 per cent compared with 10.66 per cent over the corresponding period last year.
The government has initially projected a target of 9.5 per cent for inflation for the year ending on June 30, 2011. However, it recently informed the IMF that countrys inflation target would escalate between 11.7 per cent to over 13 per cent following the floods hit the crops and damaged the infrastructure. The IMF has forecast Pakistans annual inflation at 13.5 per cent.
Officials in the finance ministry linked the hike in inflation with continued pressure on food prices, fiscal pressure due to security situation, adjustment in utility prices, increase in transport charges, continued depreciation of rupee, which pushed upward cost of imported raw materials, goods and services, high mark-up rate and loss in productivity due to power shortages.
Figures released here showed that food inflation increased to 21.24pc in September over the last year month. Prices of non-perishable food items witnessed a surge of 16.04 per cent and that of perishable items 53.86 per cent. Prices of industrial goods have also recorded a tremendous increase during the month under review, belying the argument that the rise is seasonal.
The food items, which registered increase during the period under review, include onions, tomatoes, potatoes, chicken, sugar, pulse moong, wheat flour, dry fruits, cereals, pulses, and cooked food.
The non-food and non-energy core inflation dipped to 9.4 per cent in September from 11.9 per cent last year on account of increase in benchmark interest rate by State Bank for the second time in two months to tame inflation.
However, the house rent index rose by 7.62 per cent and medical care cost by 12.47 per cent in September over the same month last year. The transportation fare increased by 15.5 per cent during the month under review over the same month last year.
DAWN.COM | Business | Inflation up 15.7pc on high food prices
