The year-on-year CPI (consumer price index) has stayed over 9 percent during the first two months of the current financial year, while SPI (sensitive price indicator) is well over 14 percent. According to monthly review of price indices for August 2004, released by the Federal Bureau of Statistics, the CPI is 9.25 percent, and the figure for July and August during this year is 9.29 percent.
The year-on-year SPI for August is 14.38 percent, and for the two months--July, August--is 14.11 percent. This means inflationary pressures are building up, on which IMF and ADB have shown concern and the new government of Prime Minister Shaukat Aziz, too, is seized with the issue.
The only silver lining, if it can be called so, is the fall in the wholesale price index. For July and August, the year on year rise is 9.06 percent, while compared to August 2003, the rise is 7.94 percent and, as compared to July 2004, a downward trend is noticeable. The fall is over one percent during one month.
The FBS review states that SPI during August 2004 increased at an average of 1.18 percent over July 2004.
The CPI during August increased by 0.59 percent over the previous month and by 9.25 percent over corresponding month of last year.
The wholesale price index during August 2004 decreased by 1.08 percent over the previous month and increased by 7.94 percent over August 2003.
The food group, with a weight of 42.12 percent, showed an increase of 11.71 percent in WPI while the cost of building material jumped by 20.27 percent in August 2004 in wholesale prices of August 2003.
This is bound to hurt the prospects of cheap housing in the country.