ISLAMABAD, June 4: An eight-year high inflation rate of 9.3 per cent has impacted the poor disproportionately during the first 10 months of the outgoing financial year, the government conceded on Saturday.
According to the Economic Survey 2004-05, released here at a news conference the inflation, as measured by changes in the Consumer Price Index (CPI), averaged 9.3 per cent during 2004-05 (July-April period) against 3.9 per cent of the corresponding period of the 2003-04 financial year.
“This 9.3 per cent inflation is due to various internal and external factors but hopefully it will be brought down at a reasonable level during the next financial year,” said Adviser to prime minister on Finance Dr Salman Shah.
“Let me assure you that this increased rate of inflation will be kept in control,” he said, adding that it was a short-term phenomenon and would come down gradually.
He said that the international oil prices were likely to get stabled in the future and would help reduce inflation. “At 9.3 per cent, inflation is at an eight-year high in 2004-05. Food inflation recorded at 12.8 per cent compared with 4.9 per cent for the corresponding period of the previous fiscal year,” said the survey report. Non-food inflation rose to 6.9 per cent as against 3.3 per cent in the last year.
“Core inflation, arrived at by excluding food and energy inflation, also indicated a rising trend for the period under review, increasing from 3.3 per cent to 7.4 percent,” the survey admitted.
The sharp upturn in inflationary trend is caused by demand pressures on the one hand and supply shocks on the other. However, the survey claimed that the strong economic growth gave rise to the income levels of various segments of society, which strengthened the domestic demand and contributed to the rise in inflationary pressure.
