BAGHDAD, Jan 29: Iraqi inflation hit an average of 70 per cent last year, largely due to soaring fuel prices, a central bank source told AFP. The government had set an inflation target of 20-25 per cent for 2006.

But the consumer price index jumped by more than 70 per cent, while the cost of petroleum products and electricity spiked by more than 80 per cent, the source said.

When volatile energy prices were stripped out, inflation came to between 30 and 35 per cent

A litre of petrol jumped from 50 dinars at the end of 2005 to 400 dinars (32 US cents) in early 2007 as state subsidies were progressively removed.

Many essential products have been subsidised since the fall of Saddam Hussein's regime in April 2003.

The International Monetary Fund had recommended that petrol subsidies be cut further and requires that structural economic reforms be undertaken by 2008 as a prelude to erasing 80 per cent of the debt owed by Iraq to creditors other than members of the Paris club of donor countries.—AFP

Updated Jan 30, 2007 12:00am

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