ISLAMABAD, Oct 10: Led by a double digit increase in food inflation, the overall consumer prices jumped again by 8.4 per cent in September over the same month last year, the Federal Bureau of Statistics (FBS) said on Wednesday. This would be the highest increase in inflation so far recorded in any month of the current fiscal year because of the soaring food prices particularly wheat flour, vegetables and fruits which touched new heights.

In the first two months — July-August — the overall inflation remained between six to seven per cent. However, the food inflation during the same period remained less than the double digit growth.

The government has projected 6.5 per cent annual inflation to be achieved during 2007-08. The annual inflation in 2006-07 was 7.77 per cent as against the projected target of 7 per cent.

When contacted Economic Advisor to Prime Minister Dr Ashfaq Hassan Khan told Dawn that the Consumer Price Indicator (CPI) based inflation was registered a growth of 8.4 per cent in September as against 8.7 per cent in the same month last year.

He said that inflation during the first quarter of the current fiscal year (July-September) was estimated at 7.1 per cent as against 8.4 per cent during the same period last year.

He said that the CPI based inflation in September 2007 was largely driven by food inflation, adding that SPI based inflation during the week ended on October 4 stood at 10.7 per cent against the corresponding week of last year.

Mr Khan said that prices of essential commodities during Ramazan remained stable adding that the SPI based inflation remained at around 10 per cent during the holy month.

He said that 6,000 utility stores would be set up by December end which would impact the market prices providing relief to the consumers.

Among the food group, the products which registered growth in prices include tomatoes, onion, besan, wheat, wheat flour, gramwhole, eggs, pulse gram, betel leaves, gur, cooking oil, mustard oil, dry fruit , tea, readymade food, vegetable ghee, vegetables, rice, jam and pickle and vinegar.

Similarly, the continuous increase in the house rent, doctor and education fees have also pushed up inflation in September 2007 over the corresponding month last year thus hitting the low income group.

Analysts said that the tight monetary policy had resulted into bringing down the core inflation — non-food, non-energy — which curtailed the overall inflation during September 2007.

However, the challenging issue of food supply and overcoming of shortage of food items still persisted as the food inflation is on the higher side, which recorded a growth of more than 10 per cent during September 2007 over the same month last year.

Similarly, the government had frozen oil prices in the domestic market that 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.