Iraq inflation soars to 22%

 

By Abdulzahra al-Hindawi

 

Azzaman, February 14, 2005

 

Iraq inflation shot to 22% in January driven by hikes in essential commodities like food, fuel, transport and rent.

 

The latest figures by the Central Statistical Bureau show that January’s inflation level was 5.8% higher than the preceding month.

 

The surge comes despite government insistence and measures that it will keep inflation unchanged to curb price hikes.

 

A statement by the bureau, the government’s statistical arm, said increases in January touched all the commodities it uses as benchmark to measure inflation.

 

The index covers commodities which absorb almost 100% of what Iraqi families spend in one month, the statement said.

 

The items include foodstuffs, fuel, transport, medical services and drugs, clothes, property, furniture and other essential goods.

 

Transport and fuel saw the highest increases (27%) followed by foodstuffs (26.4%).

 

The government is scrapping fuel subsidies resulting in sharp increases in fuel prices and transport fees.

 

Despite the hikes the government has stopped short of raising salaries.

 

Analysts said the steep hikes in prices coupled with the absence of law and order in many Iraqi cities are bound to undermine government’s efforts to build bridges of trust with the population.