ISLAMABAD, May 18: With inflation continuously on the rise, Pakistan has hired the services of International Monetary Fund (IMF) to restructure its consumer prices index (CPI) basket with effect from July 1, 2005. The CPI during the July-April this fiscal year has gone up by 9.27 per cent over the same period last year. It increased by 11.10 per cent in April over corresponding month last year while it rose by 1.74 per cent when compared with March this year.
The 92-item CPI was last restructured in 2000-01 from base year 1990-91. The government says the consumption pattern in the country has changed in the last five years and hence the need for rebasing the CPI basket. But more importantly, it claims that about 23.4 per cent weight of house rent in CPI-basket was erroneously kept unrealistically high in 2000-01 which should be corrected.
Adviser to the prime minister on Finance and Revenue Dr Salman Shah told Dawn that the government has assigned the task of rebasing the CPI to the IMF for independent and professional handling otherwise the people may accuse the government of manipulating the CPI weight box for political reasons. Pakistan graduated from the IMF programme last year but continues to have its technical assistance and annual review of economy under Article-4 consultation.
Sources in the Federal Bureau of Statistics said a team of IMF has completed homework and initial discussions on the subject with the government, and another team would be visiting Islamabad within the current month to move the process forward. They, however, said the secretary statistics division Asad Elahi has been conducting different exercises on CPI rebasing and examining the weightage of house rent in the last three months.
The average weight to house rent, these sources said, has remained more or less the same mainly because of rise in construction cost and, as a result, in rent as well. In the existing CPI, food and beverages sector has the highest weight of 40.34 per cent, followed by 23.43 per cent house rent. Wheat flour alone has a share of 5.1 per cent weight.
Fuel and lighting and transport and communication sectors together have a weight of 14.61 per cent. This includes 7.29pc fuel and lighting and 7.32pc transport and communication.
Similarly, the apparel, textile and footwear sectors have 6.10 per cent weight in the basked while cleaning, laundry and personal appearance sectors 5.88 per cent. Household, furniture and equipment have 3.29 per cent share while education and medical care 2.07 per cent.