Price hike drops to ‘unbelievable’ 7.9 per cent

Though, increased salary of government employees and surplus money in the market is pushing the prices high up, apart from rising petroleum products’ prices and strengthening US dollar that are making the imports more expensive, the central bank data claimed that the price hike has dropped to 7.9 per cent in the first month of the current fiscal year.

In the first month of the current fiscal year 2013-14 – mid-July to mid-August –  recorded inflation at 7.9 percent compared to 11.9 per cent in the same month a year ago, the central bank report claimed, adding that the decrease in prices of food and beverage group, and non-food and services group has pulled the inflation down.

The government – in the current fiscal year’s budget – has promised to contain the inflation at seven per cent despite its repeated failure in cracking whip on price hike.

However, the data revealed that the trade deficit has widened to Rs 41.56 billion in the first month of the current fiscal year, as the country imported Rs 49.15 billion worth merchandise and exported only Rs 7.59 billion. In the same month last fiscal year, the country had imported Rs 46.98 billion worth merchandise.

The country imported petroleum products — worth Rs 9.10 billion — making it the highest import, as usual.

Similarly, the Balance of Payments (BoP) recorded a surplus of Rs 16.09 billion during the first month of the current fiscal year – against the surplus of Rs 5.56 billion in the same month a fiscal year ago – due to Rs 10.07 billion current account surplus. The central bank attributed the current account surplus to primarily low growth of merchandise imports and decline in the service imports.

Due to strengthening US dollar, the remittance inflow stood at Rs 41.86 billion whereas the first month of the  last fiscal year, the country had received Rs 33.81 billion worth remittance.

Similarly, the gross foreign exchange reserves increased by 4.2 percent to Rs 555.87 billion in mid-July to mid-August, up from Rs 533.3 billion recorded a month earlier, according to the central bank data.