CBI attributes higher inflation to intl. increase in food prices

The Central Bank of Iraq (CBI) attributed the rise in the basic inflation rate in April 2008 to the unexpected increase in international food prices.

"Basic inflation index in Iraq was remarkably high in April 2008 due to an external shock that is still affecting the Iraqi economy in the light of a sudden increase in international food prices," the bank said in a statement received by Aswat al-Iraq, Voices of Iraq, (VOI).

The rise in the annual basic inflation index reached 16%, according to the statement.

Food is the most important element in the market basket of goods used in calculating the consumer price index (CPI), which measures inflation at the retail level, the statement explained.

The figures announced by the central bank contradicted those revealed in a report by the Iraqi Central Agency for Statistics and Information Technology yesterday, but both figures demonstrated an increase in the basic inflation index in April.

Iraq's inflation rate index rose by 1.8% in April 2008, compared to March 2008, while the annual inflation rate jumped by 5.5% in the period April 2007-April 2008, the central agency said.

A rise in the CPI reflected an increase in the average price of the following consumer goods and services: foodstuffs (13.6%), furniture (0.8%), medical services and medicines (1.3%), and varied goods and services (0.6%), according to a report released by the agency and received by VOI.

Constituting 20.2% of household spending, the report indicated that the prices of cigarettes and beverages; cloth, clothes and footwear; fuel and lightening; and transport cost were higher by 1.4%, 0.2%, 4.9%, and 2.5% respectively.
 
The report, which is based on field data about the retail prices of goods and services in local markets, revealed a 20.1% decrease in lightening and fuel prices in April 2008, compared to the same month of last year.