Inflation rises to four percent in Pakistan

Islamabad, March 2 (IANS) Annual inflation in Pakistan has risen to four percent in February 2016 from 3.3 percent in the preceding month, the country’s Bureau of Statistics has showed.

Average inflation for July-February 2015-16 stood at 2.48 percent, Dawn online cited the bureau as showing on Tuesday.

The Consumer Price Index (CPI), used to measure prices of 481 commodities, has been witnessing an upward trend since November 2015.

Prices of non-perishable and perishable products increased by 2.8 percent and 2.42 percent month-on-month in February 2016.

Additional upward pressure came from the hike in prices of clothes and footwear, housing, health, water, electricity, gas and fuel, transport and furnishing equipment.

One of the reasons for the surge in inflation was the introduction of Rs.40 billion new taxes on import of processed food and other items.

Core inflation, measured by excluding volatile food and energy prices, was recorded at 4.5 percent during the month under review, slightly up from 4.3 percent in the previous month.

Falling inflation has also encouraged the Pakistani bank to maintain its key interest rate at 6 percent (42-year low).

Core inflation has remained subdued since November 2015 because of a tighter monetary policy and reduction in fuel prices.

In February 2016, food inflation stood at 3.7 percent.

Average inflation measured through the Sensitive Price Index (SPI) was up by 1.02 percent in July-February 2015-16, while Wholesale Price Index (WPI) was still negative 1.70 percent.

Lower Wholesale Price Index reflects less demand for domestic commodities, mainly because of low purchasing power.

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