ISLAMABAD - Following the massive decline in oil prices globally; the government has restricted the inflation at 4.53 percent during previous fiscal year (July 2014 to June 2015), well below the government's projection of 8 percent.
Inflation measures through Consumer Price Index (CPI) recorded at 4.53 percent in last financial over its preceding year, according to the latest data released by Pakistan Bureau of Statistics (PBS) on Wednesday. The government has achieved the inflation target by keeping it at below projection of 8 percent during the fiscal year ended on June 30 2015.
The inflation remained at lowest level mainly due to the massive decrease in petroleum prices in international market, as it touched 12 years lowest level of 2.1 percent in April 2015. The State Bank of Pakistan (SBP) in successive monetary policy had reduced the interest rate announced from November 2014 onwards following the steep decline in inflation rate. On May 23 2015, the SBP reduced the interest rate by one percent to seven percent from eight percent, the lowest in 42 years.
"Inflation has decreased not only due to the decline in petroleum products prices but also because of implementing appropriate monetary and fiscal policies as well other administrative measures to control the prices and supply situation in the country", a finance ministry official told The Nation wishing not to be named.
He further said that government has kept the inflation target at 6 percent for the ongoing financial year 2015-16, slightly higher than what it remained in last year. "The government has kept the inflation rate at higher side for the current year due to the expected increase in oil prices in international market that would enhance the prices of commodities", the official concluded.
According to the PBS figures, the sensitive price indicator (SPI), which gauges weekly inflation in kitchen items, increased by 1.74 percent in July-June 2014-15 as against the same months of last year. However, the wholesale price index (WPI) based inflation decreased by 0.30 per cent in the period under review.
Meanwhile, the CPI inflation remained at 3.2 percent during the month of June 2015 as compare to the same month of the previous year. According to the data, food and non-alcoholic beverages prices had enhanced by 2.41 and utilities (housing, water, electricity, gas and fuel) by 4.85 percent in June 2015.
Health and education charges went up by 3.33 percent and 9.57 percent, respectively. However, transportation charges were down by 8.54 percent because of the declining petroleum prices.
Prices of alcoholic beverages and tobacco stood at 17.54 percent, clothing and footwear 5.6 percent and furnishings and household equipment maintenance 3.67 per cent. Charges related to recreation and culture went up 2.25 percent and restaurants and hotel 4.39 percent in June 2015 over the same month in 2014.
Meanwhile, the PBS data showed that price of tomatoes increased by 31.72 percent in the month of June 2015 against May, price of tomatoes enhanced by 22.58 percent, price of chicken surged by 14.91 percent, price of cigarettes went up by 13.45 percent, price of besan increased 8.32 percent, price of pulse gram up by 7.07 percent and sugar price enhanced 4.8 percent during June 2015.
Similarly, in non-food commodities, kerosene oil price surged by 5.53 percent, motor fuel 2.71 percent, tailoring 1.74 percent, furniture 1.1 percent.
Meanwhile, prices of following commodities decreased: fresh vegetables 11.11 percent, fresh fruits 3.11 percent, wheat flour 1.6 percent, rice 1.26 percent and furniture 1.1 percent during June 2015 against May.