Yearly Inflation Rates of Pakistan ( 1990-91 = 100

)
Inflation Rates based on Sensitive Price Indicator (SPI), Consumer Price Index (CPI) and Wholesale Price Index (WPI) are

Period 1991-1992 1992-1993 1993-1994 1994-1995 1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

SPI 10.54 10.71 11.79 15.01 10.71 12.45 7.35 6.44 1.83 4.84 3.37 3.58 6.83 11.55 7.02 10.82

CPI 10.58 9.83 11.27 13.02 10.79 11.80 7.81 5.74 3.58 4.41 3.54 3.10 4.57 9.28 7.92 7.77

WPI 9.84 7.36 11.40 16.00 11.10 13.01 6.58 6.35 1.77 6.21 2.08 5.57 7.91 6.75 10.10 6.94

Pakistan faces high inflation despite historic lows in region
By: Erum Zaidi | Published: May 12, 2009

KARACHI - As inflationary pressures across the globe continue to dissipate, Pakistan still faces a very high double-digit inflation. A regional comparison of inflation reveals the rigidity of inflation in Pakistan in comparison to other regional players. Except for Iran, all the countries have shown notable deceleration in their inflation rates from July 2008 to March 2009. Inflation in India is at historic low, whereas, Thailand has seen deflation during March 2009 from a high of 9.2 percent in July 2008.

Other countries like Philippines, Vietnam, and Sri Lanka witnessed substantial deceleration in inflation since December 2008. In Pakistan, the Federal Bureau of Statistics has 17.19 percent inflation in April YoY . Most of the economists believed the price pressures are still not on ease, as highlighted from 1.4 percent MoM increase in March. Both, the WPI and SPI have also depicted a 1.68 percent month-over-month increase. However, price stresses may ease on account of slackening demand pressures due to bumper wheat and minor crops.

Although all the price indices like the CPI including core inflation, WPI and SPI have shown a downward trend in recent months, the decline has been subject to stiff downward rigidity. Ministry of Finance’s report titled “Review of Economic Situation for the Period JulyMarch 2008-09” projected the average inflation for the year (2008-09) close to 20 percent with end year inflation of around 11 percent. The most optimistic estimate for the next year inflation will be around 6 percent. Report also pointed out that month-on-month increase in food and non-food inflation in the months of February and March has been especially disappointing. The sugar and wheat have to play its role in inflationary environment in Pakistan in the final quarter of this fiscal year (April-June 2009). The dirty work of extra-market forces kept fruits of falling inflation away from Pakistan’s consumers. Notwithstanding, difficult domestic environment, the inflation rate as measured by the changes in Consumer Price Index (CPI) showed an easing trend beginning in November 2008, touching 19.1 percent in March 2009 after reaching a record level of 25.5 percent in August 2008. While the food group was the major source of inflation in Pakistan during the first nine months of 2008-09, the non-food component of the CPI has also been persistently high, resulting in overall stubbornness of the inflation.

INFLATION RATE CONSUMERS PRICE:
Year Inflation rate (consumer prices) Rank Percent Change Date of Information 2 003 2 004 2 005 2 006 2 007 2 008 3.90 % 2.90 % 4.80 % 9.10 % 7.90 % 7.60 % 90 123 143 186 168 162 -25.64 % 65.52 % 89.58 % -13.19 % -3.80 % 2002 est. 2003 est. FY03/04 est. 2005 est. 2006 est. 2007 est.

EFFECTS ON INFLATION ON PAKISTAN’S ECONOMY:
Inflation affects the different sectors of the economy

• • • • • • • • • • • •

Effects on the distribution of income and wealth, Effects on production, Effects on the Government, Effects on the Balance of Payment, Effects on Monetary Policy, Effects on Social Sector, Effects on Political environment and different classes of the people (Debtors & Creditors, Salaried Class, Wages earners, Fixed income group, Investors and shareholders, Businessmen, Agriculturists

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