Sunday, Jul 03, 2011
(This item was originally published on Thursday.)
By Hassan Hafidh
Of DOW JONES NEWSWIRES
AMMAN (Dow Jones)--Iraq's year-on-year rate of inflation rose in May to 6.3%, compared with 6.1% the previous month, driven by soaring food stuffs and oil prices, a senior central bank advisor said Thursday.
Mudher Kasim told Dow Jones Newswires by telephone from Baghdad that the rise in core inflation was mainly due to increases in oil prices which led to higher prices of food stuffs such as sugar, flour, rice and tea, which rose 55%. Iraq imports most of its food stuffs.
Kasim said he expected inflation to continue to pick up next month, for the same reasons, but he added the rate remains within the control of the central bank.
Iraq's lowest year-on-year inflation rate in three decades was recorded last year when it slipped to 2.7%, compared with a rate of 70% under the former Iraqi leader Saddam Hussein's regime.
Kasim also said that he expected Iraq's economy to grow at a rate of 9% in 2011 compared with 4.5% the previous year due to the huge investment in Iraq's oil sector.
Over the last two years Iraq has signed some 12 oil deals with international companies that would boost the country's crude oil production to at least 8 million barrels a day in the next decade or so. Iraq is currently producing 2.7 million barrels a day.
Iraq, holder of the world's third-largest oil reserves, depends on its oil revenue to finance around 95% of its national budget.
-By Hassan Hafidh, Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com
(END) Dow Jones Newswires
03-07-11 0359GMT
