Inflation drops by 6% - minister

 

Azzaman, April 21, 2005

 

Inflation rates declined in March in comparison with rates in the preceding month, according to Planning Minister Mahdi al-Hafidh.

 

The headline rate inflation, which includes the cost of fuel, transport and consumer goods, had fallen by 6% in March, Hafidh said.

 

In email remarks to the newspapers, Hafidh did not attribute the drop to prices rising slowly for falling.

 

But the plunge is widely believed to be the result a substantial drop in fuel prices following huge imports from neighboring countries.

 

Hafidh said fuel prices had dropped by 48.6% in March in comparison to April.

 

The Ministry of Oil has recently managed to alleviate fuel shortages, leading to a drastic decline in demand for gasoline in the spot market where prices are outside government control.

 

Fuel is highly subsidized in Iraq and prices of byproducts like gasoline, kerosene and gas are even lower than neighboring Iran, a major oil producer.

 

The goods and services included in the Planning Ministry’s index on inflation, according to Hafidh, make up nearly 20% of what an average Iraqi family consumes.

 

Hafidh said the ministry monitors 446 commodities for its index.

 

Most volatile have been the 176 foodstuffs the ministry tries to keep track of the ups and downs in their prices every month.

 

The rest include fuel, medicines, rent and other utilities.

 

The index does not cover the cost of house-buying which has reportedly surged in the past few months despite mounting violence.