ISLAMABAD: The annual inflation went up to 11.01 per cent during the outgoing fiscal year 2011-12, according to data released on Monday. Annual headline inflation, measured by the Consumer Price Index, leapt on the back of food inflation, rising oil prices in the world market and spike in textile products, suggested data of the Pakistan Bureau of Statistics.
The government had projected inflation at 11.5 per cent for 2011-12. The inflation gradually came down, but it was still on the higher side. Former economic adviser Dr Ashfaq Hasan Khan told Dawn the double digit inflation over such a long period had devastated the fixed and low-income group, which were in majority in the country.
Relentless borrowing by the federal government from banking sources and the State Bank to finance budget deficit is the main reason for the persistence of higher inflation.
At the same time, Mr Khan said the persistent increase in prices of POL products and electricity and fixing prices of commodities at unreasonably high rates further aggravated the inflationary condition.
The main contributor, the statistics show, was food inflation which went up by 10 per cent. Prices of non-perishable food items witnessed a surge of 9.66 per cent and that of perishable items by 11.73 per cent.
The non-food and non-energy core inflation rose to 11.4 per cent in June 2012 from 11.1 per cent in May. The house index rent rose by 10.75 per cent, medical care cost by 14.25pc and transportation fare by 8.85pc.
The rise in transportation fare was driven mainly by increase of diesel, petrol and CNG filling charges. Electricity charges also went up by more than 50 per cent.
The analysts linked the hike in inflation to continued pressure on food prices, fiscal pressure due to security situation, adjustment in utility prices, continuing depreciation of the rupee, which pushed upward the cost of imported raw materials, goods and services, high mark-up rate and loss in productivity due to power shortages.
The impact of imported inflation was also very high during the outgoing fiscal year, especially due to import of essential food items like sugar, edible oil, pulses and tea.