ISLAMABAD, May 12: Inflation surged to an all-time high of 17.21 per cent in April on the back of spiralling food and energy prices, but the coalition government is yet to initiate any measures to bring it down.
Rising demand and falling supply of food items particularly wheat flour pushed the prices to unprecedented level, eroding the purchasing power of middle and lower income class.
Figures issued by the Federal Bureau of Statistics showed that food inflation, measured through the Consumer Price Index (CPI), ballooned to record 25.50 per cent in April, the highest not only in the country but in the entire region. In March the food inflation stood at 20 per cent.
In the food basket, price of non-perishable food items witnessed an increase of 27.33 per cent and perishable items 14.05 per cent in the month under review, reflected that price spirals were not seasonal as industrial goods have also witnessed tremendous increase.
All food items including eggs, fresh fruits, wheat flour, chicken farm, potatoes, wheat, rice, pulse gram, besan, onions, maida, cooking oil, pulse masoor, milk products, milk fresh, cereals, meat, ready-made food, gram whole and dry fruits saw unprecedented hikes in April.
Dr Pervez Tahir, former Chief Economist, told Dawn that the government would have to ensure at least provision of subsidised flour, pulses, meat and ghee etc., to the poverty stricken segment of society through utility stores.
He suggested the subsidy should be given on these essential food items.
He, however, agreed that inflation was a worldwide phenomenon and could not be checked in a short time.
The core inflation - non-food and non-energy - also swelled to 10.8 per cent in April, the highest in the past couple of years as against 5.6 per cent last year on account of rising house rent and medicare sub-indices.
The house rent increased by 11.35 per cent and medicare by 7.44 per cent during the month under the review.
The non-food inflation also spiked to 9.6 per cent in April on the back of a four-time increase in the domestic petroleum prices.
Dr Tahir asked for reducing the taxation component on oil to reduce the impact of rising prices to the consumers.
For 2007-08, a 6.5 per cent annual inflation had been projected. However, the inflation in the first 10 months reached 10.27 per cent, up from 7.89 per cent during the same period last year.
Dr Kaiser Bengali, known economist, said that the recent decision of the finance ministry to reduce non-development budget would have a positive impact on borrowings from the central bank. He said the reduction in money supply would also have an impact on over all inflation.
Transportation charges recorded an increase of 17.92 per cent in April and education 4.70 per cent.
The wholesale price index (WPI), the most commonly used measure to monitor the cost of production, rose to 23.50 per cent in April, which was a record high. It indicates an increase in prices of 425 items at wholesale level.
The average weekly inflation of essential commodities witnessed an increase of 24.94 per cent in April over the last year.