ISLAMABAD - After reaching peak levels in last more than one year, the pace of soaring inflation rate has eased to the 14th months lowest level of seven percent in August 2014 over the corresponding period of previous year.

The inflation based on consumer price indicator (CPI) - the main national indicator reflecting change in prices of basket of goods and services - clocked in at 7 percent during previous month (August) over corresponding month of last year. The inflation rate has touched the lowest level of 7 percent after 14 months.

Inflation rate remained at higher side in last one year, as it hovered around 8-8.5 percent. Earlier, the CPI based inflation had recorded at 5.9 percent in June 2013, which was lowest level before the figures of August 2014. Inflation rate is not increasing mainly due to the non-increase in petroleum products prices from few months, as government either reduced the prices or kept unchanged. The POL prices directly impacted the inflation rate.

According to the Annual Plan, in view of the rationalisation of subsidies, monetary overhang and rising demand, inflation for 2014-15 is projected at 8pc. However, the sources in Finance Ministry said that government would restrict it at around eight percent, as it is not increasing the petroleum products prices from last few months.

The International Monetary Fund (IMF) in its latest report about Pakistan noted that inflation is on downward trajectory. “The IMF is encouraged by the overall progress made in pushing ahead with policies to strengthen macroeconomic stability and reviving investment and growth. Economic indicators are generally improving, with growth continuing to gain momentum, inflation on a downward trajectory, and credit to the private sector rebounding sharply. GDP growth is now expected to rise by 4.3 percent in fiscal year 2014/15 (to June 30), compared to a provisional estimate of 4.1 percent in FY2013/14”, said a brief statement issued by the Fund.

Meanwhile, according to the figures of Pakistan Bureau of Statistics (PBS), the CPI based inflation has recorded at 7.44 percent during first couple of months (July and August) of the ongoing financial year over the corresponding period of the last fiscal year. Meanwhile, the sensitive price indicator (SPI), which gauges weekly inflation in kitchen items, has decreased by 5.53 percent in July-August 2014 as against the same month of last year. Similarly, the Wholesale Price Index (WPI) based inflation increased by 4.91 percent in the period under review.

According to the PSB figures, on month-on-month basis, it increased by 0.3 percent in August 2014 as compared previous month (July) and by 1.2 percent in August 2013.

Meanwhile, the break-up of CPI based inflation (7.88 percent) in August 2014 showed that prices of food and nonalcoholic beverages shot up 4.65 percent, alcoholic beverages and tobacco 22.56 percent, clothing and footwear 9.26 percent, housing and utilities charges 8.92 percent, transportation fares 4.23 percent and healthcare charges 6.84 percent as compared to August 2013. Charges of recreation and culture were up by 4.27 percent, education 15.31 percent, restaurant and hotel 10.88 percent and miscellaneous by 7.13 percent in the period review.

Meanwhile, the PBS data showed that price of eggs increased by 19.48 percent in the month of August 2014 against July, price of fresh vegetables enhanced by 12.55 percent, price of onions went up by 8.93 percent, price of pulse mash surged by 4.4 percent, price of wheat flour increased by 3.51 percent, price of potatoes surged by 3.13 percent, price of wheat went up by 2.88 percent, price of sugar enhanced by 2.02 percent, price of honey enhanced by 1.41 percent, chicken 1.19 percent, gur 1.15 percent and price of wheat raised by 2.88 percent during the month of August over July.  Similarly, in non-food items, Motor Vehicle Tax enhanced by 1.94 percent, personal care charges up by 1.08 percent and household servant 1.06 percent during the period under review.

Meanwhile, prices of following commodities decreased, fresh fruits 17.54 percent, pulse moong 4.7 percent and fish 2.24 percent during the period under review.