The Economic Co-ordination Committee (ECC) of the Cabinet was informed that Pakistan is experiencing the second highest inflation in the region after Bangladesh, it is learnt. Sources said the ECC was informed that a regional comparison suggests that Pakistan and Bangladesh are experiencing higher inflationary pressure as compared to other countries with 11per cent and 11.7 per cent respectively.
The meeting was informed that the year-on-year Consumer Prince Index (CPI) in Pakistan was 11 per cent, while in India it was 7.7 per cent for January 2012, 2.7 per cent in Sri Lanka and 4.5 per cent in China for January 2012. An official of the Finance Ministry attributed high fiscal deficit, increase of wheat support price from Rs 950 per 40 kg to Rs 1050 per 40 kg and rising prices of petroleum and other commodities in the domestic market as major reasons for spike in inflation in the country. He said that the inflation is expected to soar in months ahead when the wheat support prices would translate into domestic market after the crops being harvested currently reach the market. The official said that increase in fuel prices, petroleum products, CNG, as well as electricity prices have contributed to inflation on regular basis with sporadic changes in their prices by the government.
According to the presentation made to the ECC, the official of the Ministry of Finance informed the ECC that year on year inflation rate based on Consumer Price Index (CPI), Wholesale Price Index (WPI) and Sensitive Price Index (SPI) for February 2012 is estimated at 11.0 percent, 7.2 percent and 8.3 percent, respectively. The meeting was told that food inflation stood at 10.5 percent and contributed 3.7 percentage points (or 33.6 percent) to inflation in February, 2012 while non-food inflation registered 11.5 percent, and contributed approximately 7.5 percentage points to CPI inflation.
The Finance Ministry latest Economic Indicators depicted mixed signs with production in the Large Scale Manufacturing (LSM) sector at 0.6 percent in December 2011 as compared to 2.2 percent in the same period last year. An increase in output in leather products, pharmaceuticals, food beverages & tobacco, textile, non-metallic mineral products and paper & board are the principal contributing sectors to the overall rise in LSM. Export growth has decreased by 0.5 percent while imports increased by 16.4 percent thus trade deficit on year-on-year basis is $14.6 billion during the July-February, 2011-12.
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