ISLAMABAD -  Pakistan’s inflation rate has gone to 5 percent during May due to increase in oil and commodities prices in the country ahead of Ramazan.

The inflation is measured through Consumer Price Index (CPI), which tracks prices of around 480 commodities every month, has increased by 5 percent in May 2017 as against same month of the last year. The inflation rate has gone to 5 percent after a long time due to global revival of international commodity and oil prices, along with rise in domestic demand due to pick up of economic activities.

However, the government has still kept the inflation rate below the target of 6 percent for the ongoing financial year. The inflation has recorded an increase of 4.18 percent during 11 months (July-May) of the ongoing financial year as against the same month of the last year, according to Pakistan Bureau of Statistics (PBS).

The government has set inflation target at 6 percent for the upcoming financial year 2017-18. However, the government might struggle to keep inflation rate in control due to heavy taxation measures and withdrawal of subsidies. The government has introduced heavy taxation measures of Rs120 billion and reduce the overall subsidy amount by Rs22 billion. These two measures would fuel the inflation rate in the next financial year, which is currently in control.

According to the PBS, the CPI Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 5.5 percent on (YoY) basis in May 2017 as compared to increase of 5.5 percent in the previous month. According to the PBS data, the Sensitive Price Indicator (SPI), which gauges rates of kitchen items on weekly basis, has increased by 1.58 percent during the first 11 months of the year 2016-17 as against the same month of last year. Similarly, the wholesale price index (WPI) based inflation increased by 4.11 percent in the period under review.

Food and non-alcoholic beverages prices have increased by 4.55 percent. Similarly, health and education charges went up by 13.46 percent and 11.17 percent, respectively. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 5.12 percent in last the month.

Meanwhile, the prices of alcoholic beverages and tobacco went up by 10.76 percent, clothing and footwear by 3.68 percent and furnishing and household equipment maintenance charges 2.59 percent. Recreational charges and those related to culture went up by 0.17 percent in the period under review, while amounts charged by restaurants and hotels by 5.37 percent in May 2017 as compared to the same month last year. In food commodities, prices of potatoes increased by 19.88 percent, fresh fruits 10.12 percent, pulse gram 2.35 percent, beverages 1.8 percent and gram whole price surged by 1.76 percent. Likewise, in non-food items, water supply charges enhanced by 2.03 percent, household servants charges up by 1.4 percent, marriage halls charges by 1.23 percent and construction wages rates surged by 1.06 percent during May as compared to April.

According to the PBS figures, price of tomatoes decreased by 40.03 percent, onion 10.67 percent, fresh vegetables 8.97 percent and chicken price down by 7.72 percent.