High food prices trigger big rise in Pakistan's CPI

15:00, October 12, 2010      

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Prices of essential food items rose by 53.86 percent in Pakistan during the month of September over the same period of previous year as floods caused severe damage to agriculture sector and disrupted food supplies, local media reported Tuesday.

Due to the rise in the prices of food items, the Consume Price Index (CPI) grew 15.71 percent in the month of September over the same month last year, according to the Daily Times.

During the first quarter July-September of the fiscal year 2010- 11, CPI rose 13.77 percent over the corresponding period of previous year, Federal Board of Statistics (FBS) reported on Monday.

Analysts said that surge in the inflation was mainly caused by the unprecedented floods damaging agriculture produce to a horrible extent.

In the food category, the impact was more visible in prices of heavyweights like wheat, pulses, meat, sugar and vegetables ( clearly associated with flood related disruption), analysts said.

Though dramatic rise in food inflation, analysts said that core inflation has so far been contained. A breathing space has thereby been created within CPI basket in the form of easing inflationary pressure from the non-food items, supported by downward slide in the core inflation.

Analysts said that power tariff increase of 2 percent also reflected in the September inflation number in the country, which ignited the prices.

They hoped that full year inflation will settle at 15 percent, however core inflation will continue to point towards non inflationary trend in non-food, non-energy prices.

Source: Xinhua


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