June 14, 2007	Thursday	Jamadi-ul-Awwal 28, 1428

ISLAMABAD, June 13: Food inflation witnessed record 11.31 per cent increase in May 2007 over the same month of last year owing to steady increase in prices of kitchen items, fruits and vegetables.

This will be the highest ever growth in food inflation in any month of the current fiscal year, which was largely borne by lower income brackets. Rising prices reduce the purchasing power of the average consumer particularly the poor.

Led by the double digits increase in food inflation, the overall consumer prices jumped again to 7.41 per cent in May over the same month of the last year, Federal Bureau of Statistics (FBS) said on Wednesday.

Analysts said the higher incidence of inflation in case of lower income groups is likely due to the fact that lower income groups spend larger shares of their income on food, which has been the driving force in inflation in the current fiscal year.

Among the food items, prices of tomatoes, potatoes, vegetable ghee, rice, cooking oil, onions, fresh fruits, milk fresh, milk powder, moong pulse, mash and mustard oil recorded growth during the month under review over the previous month.The upward trend in inflation had started for the last three months even though the economic wizards of the current government had claimed to have controlled the rising inflationary pressure in the economy.

The inflation surged by 7.84 per cent in 11 months of the current fiscal year over the same period of the last year. This again showed that the year to year inflation is likely to be around eight per cent by end June 2007.

The government had already admitted to have missed the inflation target of 6.5 per cent projected for the fiscal year 2006-07 despite the tight monetary policy of the State Bank of Pakistan.The statistics indicated that the inflation went up by 0.92 per cent in May 2007 over April 2007. This would be the highest ever increase in inflation over the previous month this year as it was only 0.45 per cent in May 2006 and 0.44 per cent in May 2005.

Apart from the increase in food items, the medicare charges and education went up by 10.24 per cent and 6.05 per cent, respectively, in May 2007 over the same months of the last year. This indicates that the charges of the basic facilities like life saving drugs and education fees sky-rocketed thus affected the monthly budget of the poor people.

The government had frozen the oil prices in the domestic market for the last couple of months, which had also resulted into lowering the transportation cost and fares. With this the non-food inflation also witnessed steep decline during the month under review.

The statistics showed that transportation charges declined by 3.04 per cent during the month of May 2007 over the same month of the last year.

However, price of house rent up by 6.16 per cent, clothes 7.04 per cent, fuel and lightening 6.16 per cent, household goods 6.17 per cent in the month of May 2007 over the same month of the last year.