Fuel, wheat push inflation to 11.2%

Annual consumer price inflation rose to 11.2 per cent in August, according to the Pakistan Bureau of Statistics, returning to double digits only a month after slipping below 10 per cent. Increases were recorded in both urban and rural areas, with food and energy groups pushing prices higher. The Express Tribune reported that the figure was released on Tuesday.

The newspaper linked the jump to the government's decision to pass the full international cost of fuel, along with taxes, onto consumers. Motor fuel was 25 per cent dearer than a year earlier, and petrol carried Rs116 per litre in tax while high-speed diesel carried Rs101. Wheat was up 87 per cent in August and wheat flour 73 per cent, while transport inflation reached 20.2 per cent.

The finance ministry had forecast 10 to 11 per cent for August and warned that inflation may stay elevated in the near term. The government's target for this fiscal year stands at 8.2 per cent, a goal the State Bank is responsible for meeting. Inflation averaged 10.2 per cent across the opening two months of the fiscal year, which the newspaper said raises the prospect of higher interest rates. The federal government will import up to one million tonnes of wheat at the provinces' request despite official figures showing 29.7 million metric tonnes of output this year.