| 2008: Iraq: Food and energy costs lift inflation rate |
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May 28, 2008 Higher food and energy costs lifted Iraq's inflation rate to 16 percent in April, still well below the rate recorded in 2007. Despite the record price of oil which was trading at 133 dollars a barrel on Monday, the oil-rich nation has not benefited from recent price rises because of corruption and security concerns. Iraq's Central Bank governor Sinan al-Shibibi said the bank would absorb the inflation rate by appreciating the Iraqi dinar against the US dollar and maintaining high interest rates which currently stand at 17 percent. The figures are still considerably lower than in 2007, when the inflation rate reached almost 32 percent. In 2006 the rate stood at almost 70 percent. In its monthly report, the Iraqi Planning Ministry said that the prices of goods and services had risen so much, they accounted for two-thirds of the spending of an average Iraqi family. The ministry said that food prices had risen by 13.6 percent while medical services, including medicines, had increased by 1.3 percent. Iraq's economy is heavily dependent on its oil exports, which have brought much-needed money to government coffers. But chronic security problems and widespread corruption are still a major obstacle to public investment and improving the lives of ordinary Iraqis. |