By Fawzi al-Hindawi
Azzaman, June 2, 2008
Inflation in Iraq hit 16 percent in April due mainly to high food prices, the Central Bank said in a statement.
It is the highest inflation rate reported this year. The surge, despite unprecedented hard cash earnings from oil sales, has angered civil servants who rely on salaried income which is not pecked to inflation.
Iraq’s inflation index relies heavily on foodstuffs which make two thirds of items included in it.
Iraqi economist Isam al-Mahawili said 2008 had seen the highest monthly rate of inflation in the past three years.
“Inflation is now devouring the latest hikes in civil servant salaries,” he said.
Mahawili said the impact of global food prices should not be blamed for the current inflation rates in Iraq.
“Iraq is not pegged to the global economic system and besides Iraq produces agricultural products.”
Mahawili blamed what he described as “greedy traders” for the latest price hikes.
The double digit inflation began early this year and by the end of January it reached 11 percent.
The Central Bank has kept its prime interest rate at 17 percent, one percentage point below April inflation.
The bank, sources said, is determined to keep interest rate above inflation.
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