ISLAMABAD, Oct 19: Inflation rose by 8.64 per cent year-on-year during July-September of the fiscal year 2005-06 chiefly owing to soaring oil prices that have an all-encompassing impact on prices.
Official data released by the Federal Bureau of Statistics (FBS) here on Wednesday indicated that in September, the year-on-year increase in inflation was 8.53 per cent.
Inflation measured by the Consumer Price Index (CPI) is creeping steadily upward during the last few years. It stood at 3.58 per cent in 1999-2000, but increased to 4.57 per cent in 2003-04 and to 9.28 per cent in the fiscal year 2004-05.
Analysts say that if the government does not come up with effective counter measures on a crash basis, the end of the current year may witness a double-digit official inflation, while the actual one may be higher than that. The targeted level of inflation was eight per cent for fiscal year 2005-06.
This means the average increase in the prices of 374 items of daily use should not rise beyond eight per cent between July-June 2006, over June-July 2004-05. But during three months of the current fiscal year, the average inflation has already reached 8.64 per cent.
They say that containing prices of essential food items is a must to check inflation. Apart from higher prices of food items, increases in petroleum prices and house rent are also responsible for pushing inflation up. An unprecedented increase in prices of real estate and cost of construction can be cited as key reasons for increase in house rent.
Other factors in the rising inflation include increase in prices of wheat and flour, sugar, construction materials, beef, chicken, onions and mutton. The more disturbing aspect of the current year inflation figure is that the factors behind them — housing, food and POL prices — disproportionately affect the poor. The increase in rents could possibly have a spiralling effect, with owners of houses demanding higher rents in response to an overall increase in general price level.
In September 2005, the CPI increased by 0.50 per cent over August 2005 and by 8.53 per cent over the corresponding month last year.
According to a group-wise analysis, 11 items in the group “food and beverages” remained on top as the group persisting in rising trend in September 2005 when compared against August 2005. These include: Onions (18.37 per cent), eggs (10.03 per cent), pulse mash (3.64 per cent), gur (3.51 per cent), chicken farm (2.47 per cent), gram whole (2.30 per cent), dry fruits (1.23 per cent), besan (1.02 per cent), readymade food (0.74 per cent), and milk powder (0.73 per cent).
Fuel and lighting energy items remained at the second position, recording a constant rise when compared against August 2005. They are: Kerosene (5.93pc), gas cylinder filling charges (1.93pc) and fire wood (1.02 per cent).
The groups undergoing the next highest increase during September 2005 compared to August 2005 was “transport and communication”: Diesel (7.53pc), petrol (6.97 per cent), transport fare charges (1.23 per cent) and tyre and tube (0.95 per cent).
The index of “education” registered an increase of 5.40pc in September 2005 over the corresponding month last year and rose by 0.45 per cent over the previous month.
