ISLAMABAD - The government’s trick of changing the methodology of calculating inflation rate has finally works for the economic mangers of the country, as inflation rate has reduced to the single digit figure of 9.8 per cent in December 2011 against same month of 2010.

The inflation, which remained on the higher side from last several months, has finally decreased to the single digit figure of 9.75 per cent in December 2011 if it is compare with the same month of 2010. The decline in inflation is mainly due to the change in method of calculating the inflation rate by rebasing the year.

However, the economists are of the view that inflation is likely to accelerate in the upcoming months due to the recent steps taken by the government by increasing the gas and petrol prices. Similarly, the government has also increased the wheat prices that would also affect the inflation rate in the coming months.

The State Bank of Pakistan in its recent report has projected that inflation would remain in double digits i.e. 12 per cent during the current fiscal year, which is the target of the government. The central bank believed that one of the main determinants of inflation is government borrowing from the banking system.

Meanwhile, according to the latest figure released by the Federal Bureau of Statistics (FBS) on Monday, the consumer price index based inflation has been recorded at 9.75 per cent in the month of December 2011 against December 2010, Sensitive Price Indicator based inflation has increased at 2.99 per cent and inflation based on Wholesale Price Index has registered at 8.32 per cent in the period under review.

According to the figures, CPI inflation is recorded at 10.87 per cent during the first half (July-December) of the ongoing financial year. The break-up of CPI-based general inflation (9.75 per cent in December 2011 over December 2010) revealed that food and non-alcoholic beverages prices increased by 9.53 per cent, alcoholic beverages and tobacco prices went up by 6.85 per cent, clothing and footwear prices soared by 14.86 per cent, housing water, electricity and gas fuels, 6.45 per cent, health care charges, 10.60 per cent, transportation charges 13.62 per cent, communication charges, 0.78 per cent, recreation and culture 5.51 per cent, education charges 11.26 per cent and restaurants and hotel charges by 10.26 per cent and miscellaneous 18.85 per cent in December 2011 against December 2010.

According to the FBS figures, prices of per dozen eggs has increased by 6.84 per cent in December against November, per kg price of wheat enhanced by 2.89 per cent, per kg price of fish 2.62 per cent, meat 1.83 per cent, milk powder 1.83 per cent and dry fruits 0.88 per cent in December against November.

However, according to the figures, price of per kg onions decreased 27.60 per cent, per kg potatoes reduced by 22.14 per cent, per kg price of sugar declined by 17.45 per cent, fresh vegetables 11.01 per cent, tomatoes 10.33 per cent, gur, 8.88 per cent, fresh fruits 3.65 per cent and chicken 3.40 per cent in December against November.