ISLAMABAD: Inflation rose to 11.05pc in February from a year ago led by an increase in fuel and manufactured products prices, statistics showed on Thursday with officials saying that the State Bank of Pakistan may increase its policy rate in the next Monetary Policy review.
The inflation, measured through the Consumer Price Index (CPI), rose by 0.30pc in February 2012 to 11.05pc from 10.1pc in January 2012, as the rising energy prices damped economic growth, suggested data of the Pakistan Bureau of Statistics (PBS) on Thursday.
Stubbornly high inflation has remained a policy challenge for the past few months when a reverse trend in prices was witnessed since December last year. Meanwhile, global commodity and crude prices have shot up fuelling inflation further in the domestic market.
The surprise turnaround in prices put the government end-year projection target of nine per cent at risk and mounting pressure on the central bank to increase interest rates remained unchanged for the past few months.
The central bank kept the interest rate unchanged at 12pc on November 30, 2011. Last monetary policy was announced on February 11 but no revision was announced in the interest rate.
The core inflation, excluding food and energy, rose to 10.6pc in February from 10.12pc in January. This slight increase will also make a strong case that the central bank may go for increasing interest rate to contain inflation.
For the first eight months, inflation reached 10.79pc, slightly over the government annual target of 9.5pc. However, PBS official said that the government has revised its annual inflation target to 12pc. At the same time, a weaker rupee will fan inflation. The State Bank seems reluctant to intervene in the market to check fall of the rupee.
It is expected that the rupee to depreciate against dollar as low as Rs96 to high of Rs100 plus by end of this year.
But contrary to this, food inflation also entered a double digit growth of 10.58pc in February, from a year ago. As a result, prices of non-perishable food items witnessed a surge of 9.60pc and that of perishable items 17.09pc.
During the month under review the prices of eggs (39.02pc), onions (37.74pc), condiments (30.94pc), spices (24.04pc), gram whole (23.18pc), fresh fruits (23.14pc), chicken (19.98pc), milk products (19.96pc), tomatoes (18.67pc) and milk fresh (18.55pc).
In the non-food basket, prices of household servant (37.37pc), kerosene (30.76pc), gas (29.41pc), firewood whole (29.36pc), motor fuel (29.19pc), personal equipments (27.30pc), motor vehicle tax (26.33pc), blades (25.20pc), woollen cloth (24.55pc) and medical equipments (24.24pc).
Aside from this clothing and footwear surged by 14.98pc, furnishing and household equipment 21pc, health 11.41pc and transport 18.8pc in February this year from a year ago.
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