ISLAMAABD - Failing to achieve other economic targets, the government has successfully achieved the inflation rate target during the previous financial year (July 2012 to June 2013), as it remained at 7.36 percent during the period under review against the target of 9.5 percent.

The government has achieved the solo inflation rate target during last financial year 2012-13, as it recorded at 7.4 percent as compare to the target of 9.5 percent during the period under review. The State Bank of Pakistan (SBP) in its last monetary policy has cut the discount rate by 50 basis points bringing it down from 9.50 to 9 percent due to constant decline in inflation rate. However, the visiting International Monetary Fund (IMF) team has reportedly showed concerns over the decline in discounts rate.

It is worth mentioning here that government has missed all major economic targets except inflation during the financial year ended on June 30 2013.

According to the latest figures of Pakistan Bureau of Statistics (PBS), inflation based on CPI (consumer price index) has clocked to 5.9 percent in June 2013 over the corresponding period of previous year.

However, the economic experts believe that Pakistan Muslim League-Nawaz (PML-N) government would struggle to restrict inflation at eight percent during the upcoming financial year 2013-14 due to imposition of new taxes worth of Rs 200 billion and withdrawal of subsidy. The inflation might increase in the weeks to come due to one percent hike in general sales tax (GST) from 16 to 17 percent. Prices of all basic commodities would sharply increase due to increase in GST leading to bring inflation rate to higher side. Similarly, the government has reduced the subsidies by 35 per cent in the budget for the next financial year 2013-14. The reduction in subsidy would also fuel the inflation.

According to the data released by PBS, inflation based on Consumer Price Index (CPI) was recorded at 7.36 percent during the last financial year (from July 2012 to June 2013) over the corresponding period of its preceding year. Meanwhile, Sensitive Price Index (SPI) based inflation surged by 7.77 per cent and Wholesale Price Indicator (WPI) based inflation increased by 7.35 per cent during July 2012 to June 2013. Meanwhile, according to the PBS figures, CPI based inflation increased by 0.7 per cent in June 2013 against May.

The break-up of CPI-based general inflation (5.85 per cent in June 2013 over June 2012) showed that food and non-alcoholic beverages prices went up by 8.05 per cent, alcoholic beverages and tobacco prices increased by 3.52 per cent, clothing and footwear prices soared by 13.64 per cent, housing water, electricity and gas fuels 0.85 per cent, health care charges went up by 9.16 per cent, transportation charges reduced 2.33 per cent, communication charges 4.13 per cent, recreation and culture charges went up by 8.19 per cent, education charges 7.39 per cent and restaurants and hotel charges by 7.97 per cent and miscellaneous 6.24 per cent in June 2013 against the same month of the preceding year 2012.

Meanwhile, according to the PBS figures, price of tomatoes increased by 23.19 per cent in the month of June against May, prices of chicken enhanced by 23.16 per cent, prices of potatoes went up by 19.16 per cent, price of gur surged by 8.42 per cent, price of beverages increased by 3.58 per cent, wheat price surged by 2.63 per cent and whet flour price increased by 2.3 per cent in June 2013 as compared to May.

Similarly, price of cosmetics increased by 6.96 per cent, price of footwear enhanced by 6.16 percent, charges of motor fuel by 2.16 per cent, sewing needle and dry cell prices went up by 1.76 per cent, construction wage rates went up by 1.3 per cent, text book surged by 1.23 percent, marriage hall charges went up by 1.12 percent and doctor and clinic fee enhanced by 1.12 percent during the month of June against the month of May.