Wednesday, December 14, 2005

Inflation down to 7.89% in November

ISLAMABAD: Pakistan’s headline annual inflation rate slowed down in November compared to October due to a decrease in domestic food prices, according to official data Tuesday.

The consumer price index rose 7.89 percent on year, compared with a rise of 8.27 percent in October, the state-run Federal Bureau of Statistics said.

The heavily-weighted food and beverages component rose 5.84 percent on year in November, down from a 6.41 percent rise in October. That component has a weighting of more than 40% on the index.

House rent - another important component of CPI - rose 10.76 percent on year in November, slower than the 11.12 percent increase in October.

In the first five months of the fiscal year that began July 1, consumer prices rose an average 8.41 percent, slower than 9.10 percent a year earlier.

Analysts said the slowdown in inflation was mainly due to administrative measures taken by the government in recent months to improve food supply to reduce domestic food prices.

“The decline in food inflation is basically having a positive impact on the overall inflation rate,” said Asif Qureshi, head of research at Invisor Securities.

“Both the major components of the CPI basket have showed a decline, which is a positive sign,” he added.

In July, the government allowed duty-free imports of essential items like wheat and sugar to improve the supply-side situation and reduce domestic prices. “Declining inflation is a very good trend. The government's full-year inflation target seems to be achievable now,” Qureshi said.

In the current fiscal year, the Pakistan government aims to keep inflation below 8%.

In the last fiscal year that ended June 30, inflation was 9.28% compared with 4.6% the previous year. Pakistan's central bank has been tightening monetary policy in recent months to curb inflation. Inflationary pressure forced the central bank to raise its key discount rate to 9.00 percent from 7.50 percent in April 2005.
__________________

__________________
Aalam-e-soz o saz main, wasl se barh ker hai firaaq
Hijr me lazt-e-talb, wasl main marg-e-arzoo...!!!