ISLAMABAD, Aug 12: The continuous price hike of essential items during the last month has put additional burden on the household budget of the most vulnerable low and middle income groups.

People were not able to buy food items like milk, sugar, meat, pulses, dairy products and cooking oil in July at the same rates as they were offered in June. The price increase was 7.44 per cent compared with the previous month, as reflected by the statistics issued by the Federal Bureau of Statistics (FBS) here on Saturday.

The Consumer Price Index (CPI) — a measure of the change in the prices of consumer goods and services — increased last month by 1.61 per cent over June. This was an increase of 7.63 per cent compared to July 2005.

The contribution of food category to overall inflation rose to 42 per cent in June, which was considerably higher than its average share of 35 per cent during the first five months of the current calendar year.

The FBS figures show that inflation rate based on Sensitive Price Index (SPI), Wholesale Price Index (WSI) and CPI for July increased by 8.9 per cent, 7.63 per cent and 8.43 per cent, respectively, over the corresponding period last year.

This unbridled price hike is undermining the government’s efforts to bring down inflation to 6.5 per cent, a target which it has set for the current fiscal year. At present inflation is hovering around 8 per cent.

Economists are of the view that inflation is eating away the 6.4 per cent growth of the Gross Domestic Product (GDP) — the wealth which a nation creates over one year. It means that the wealth this nation creates over one year is being consumed by the rising prices of goods and services over that very year especially those belonging to lower and middle income groups.

Food and beverages has been leading the price hike trend. The prices of tomato increased by 69.35 per cent in July over June, onion 19.34 per cent, chicken farm 13.80 per cent, overall vegetables 12.92 per cent, fresh fruit 8.27 per cent, beverages 2.36 per cent, besan 2.31 per cent, pulse (moong) 1.63 per cent, beetle leaves and nuts 1.61 per cent, eggs 1.21 per cent, jam tomato, pickle and vinegar 1.13 per cent, prepared food 1.02 per cent, potato and milk (fresh) 0.84 per cent, tea 0.62 per cent, milk products and gur 0.61 per cent, spices 0.60 per cent, wheat 0.57 per cent, sugar 0.56 per cent and meat 0.54 per cent.

Only the prices of gram and pulse (masoor) decreased by 1.12 per cent each. Dry fruits also went down 0.54 per cent. The prices of Bajra and jawar witnessed 8.50 and 1.52 per cent decrease, respectively.

The prices of natural gas also went up by 8.76 per cent last month compared with the month before.

Movement across the country is becoming increasingly expensive. Domestic air fares increased by 10.26 per cent in July over June. Compressed Natural Gas (CNG) filing charges went up by 6.58 per cent, while that of tyre and tube 0.7 per cent. The high energy prices at international and domestic level have also affected consumers in Pakistan.

Building materials also became more expensive last month and is taking a heavy toll on the reconstruction activities in the quake-hit areas of the NWFP and Azad Kashmir, and it is feared that the construction of a large number of houses would not completed before winter.

The prices of bricks increased by 3.74 per cent in July over June, wire and cables 4.53 per cent, tiles 2.11 per cent, timber 2 per cent, iron bar and steels 1.68 per cent and glass sheet 1.48.

The constant increase in transportation charges and the prices of construction material is also undermining the construction activities across the country.