ISLAMABAD, April 1: Inflation rose 6.6 per cent in March from a year ago, witnessing the slowest pace of increase in 38 months.

Though it has entered single digit, it still shows price spiral, mainly driven by the increase in the price of fuels and lubricants during the period under review.

On a month-on-month basis, the inflation measured through the Consumer Price Index increased by 0.4pc in March from the previous month, suggested data of Pakistan Bureau of Statistics (PBS) on Monday.

For the first nine months (July-March) of this fiscal year, inflation rose at an average rate of 7.98pc over the same period last year, slightly lower than the government projected annual target of 9.5pc.

The falling trend in inflation shows that the government may be able to achieve its target.

Core inflation, which is non-food and non-energy inflation, rose 9pc in March from a year ago, but witnessed a slight decrease when compared with February.

The State Bank of Pakistan had kept its key policy rate unchanged at 9.5pc in the monetary policy announced on Feb 8, 2013.

In March, total food inflation was 6.2pc from a year ago, non-perishable food items witnessed a surge of 7.12pc. However, prices of perishable items decreased 1.81pc in March this year over last year.

The prices of food items witnessed growth in March this year over last year. These include tomatoes (100.22pc), wheat 22.89pc, wheat flour 19.31pc, honey 18.57pc, rice 17.30pc, wheat products 15.67pc, tea 14.31pc, milk powder 13.55pc, beans 12.47pc, onions 11.33pc, potatoes 10.66pc, and milk fresh 1010.62pc.

On the other hand, non-food inflation witnessed an increase of 6.7pc in March from a year ago, mainly driven by increase in oil price.

The international oil price was on the rise since August last year and reached the highest level at $120 per barrel.

However, its impact in the domestic market would be reflected in April.

The increase in oil price is reflected from surcharge in transportation charges, which witnessed an increase of 6.02pc in March from a year ago.

Non-food items which increased include text-books 44.71pc, woolen readymade garments 19.97pc, cleaning and laundry 17.99pc, dopatta 17.48pc, electricity 16.39pc, doctor’s clinic fee 15.06pc, tailoring 14.62pc, readymade garments 14.56pc, newspapers 13.68pc and hosiery 13.34pc.

The PBS statistics showed that inflation measured through sensitive price index was up 8pc in March and inflation in the wholesale manufactured products also increased 8.05pc over March last year.

At the same time, a weaker rupee will fan inflation. The State Bank seems to be reluctant to intervene to check the fall of rupee.