Highest rise in inflation since Sept 2012

ISLAMABAD: Pakistan’s inflation rose 8.3 per cent in July 2013 from a year ago, the highest since September 2012, according to Pakistan Bureau of Statistics. Experts, however, cautioned the government on increased risk of price hike in manufactured items. Since June 12, prices of manufactured items are on the rise because of increase in the sales tax rate from 16pc to 17pc and imposition of withholding tax on various products in the last budget. As a result, inflation measured through consumer price index (CPI) increased by 2pc in July from the previous month, reflecting the impact of taxation on consumer prices. Upward adjustments in prices of petroleum products further fueled inflation last month. In the next few months, prices are expected to increase further due to the second consecutive hike in petroleum prices, the rupee depreciation and the electricity charges of industrial and commercial users, which are all likely to result in increased cost of production and also push up non-food inflation. Prices traditionally rise in Ramazan which will be incorporated in August’s data. The government has projected an inflation target of 8pc for 2013-14 fiscal year compared to 7.38pc in the year 2012-13. Core inflation, which is non-food and non-energy inflation, rose 8.2pc in July 2013 from a year ago. In July, total food inflation was at 9.2pc from a year ago, non-perishable food items witnessed a surge of 6.90pc and perishable items increased 20.92pc in July over last year. Industrial goods recorded a massive increase during the last month validating the argument of an increase in prices in the coming months. The price of food items, which registered an increase include: Tomatoes 247.10pc, onions 61.82pc, tea 25.34pc, wheat flour 23.43pc, wheat 22.47pc, fresh vegetables 19.56pc, gur 18.19pc, wheat products 17.95pc, cigarettes 14.96pc, rice 13.19pc, cereals 11.62pc and potatoes 11.46pc. On the other hand, non-food inflation witnessed an increase of 7.6pc in July 2013 from a year ago. This is mainly because of increase in the prices of petroleum products during the month under review. Non-food items prices that rose in July over last year include: postal services 25.98pc, woolen readymade garments 18.92pc, footwear 18.78pc, tailoring 16.03pc, dupatta 14.99pc, cotton cloth 14.32pc, cleaning and laundry 14.10pc, newspapers 13.68pc and text-books 12.95pc. The PBS statistics showed that the inflation measured through sensitive price index was up by 9.80pc in July and inflation in the wholesale manufactured products also increased 6.55pc over July last year.