Exactly when inflation has risen to an all-time high of 19%. This is like offering them peanuts.
http://www.dailytimes.com.pk/default.asp?page=2008\06\12\story_12-6-2008_pg5_1
Inflation at all-time high of 19%
*By Tanveer Ahmed *
KARACHI: Inflation reached all-time high of 19.27 percent in May, mainly because of growing prices of food items.
The coalition government has already hinted at missing of inflation target of 6.5 percent in the Economic Survey released Tuesday and believed the average inflation settling over 11 percent by the end of financial year 2007-08.
Analysts, however predict the average inflation will be closing at 12 percent or slightly above that in the fiscal year, which will end June 30, 2008.
Data released by the Federal Bureau of Statistics Wednesday showed that food inflation, measured through the Consumer Price Index (CPI), swelled to record 28.48 percent in May, highest in over three decades.
In the food basket, price of non-perishable food items witnessed an increase of 33.13 percent and perishable items 1.09 percent in the month under review.
The food items including rice, onions, potatoes, besan, pulse gram, pulse masoor, maida, sugar, gur, wheat flour, pulse moong, beverages, gram whole, fresh fruits, cereals, wheat, readymade food, spices, mustard oil, sweetmeat and nimco, milk fresh, vegetable ghee, pulse mash, milk products, milk powder etc saw major increase in their prices during the month under review.
The figures shows CPI inflation surged by 11.11 percent during July-May period of current financial over the corresponding period whereas on month on month basis, it also increased by 2.69 percent in May over the preceding month of April.
The economic survey cited the high global prices of food, fuel and other commodities driven by a weaker rupee, import costs and gradual removal of fuel, food and power subsidies and monetary overhang on account of excessive borrowing from the SBP to finance the fiscal deficit have been major factors in pushing the prices to new highest during the current fiscal.
These factors will continue to exert pressure on overall prices in the next two to three years. The longer the high inflationary pressure persists, the greater is the chance for wage-price spiral to gain firm hold, it added.
The other components of CPI basket also posted substantial increase in the month of May. House rent surged by 12.05 percent, transport and communication by 19.14 percent, medicare by 14.06 percent etc.
Sensitive Price Index (SPI) also increased to 29.92 percent in May 2008 whereas the Whole Price Index (WPI) surged to 28.24 percent in the month under review.
This year’s inflation started with 6.4 percent in July 2007, but kept increasing by reaching the all time high of 19.27 percent in May 2008. Similarly, food inflation, having 40 percent weightage in CPI basket also began the year at 8.5 percent but it also shoot up unprecedently to 28.48 percent, which was highest increase since 1974-75 when it touched 27.8 percent.