Iraqi Dinar Goes Up and Brings Inflation With it!

Iraqi prices have risen more than 30% so far this year when compared with 2007, the Central Statistics Bureau said in its latest report.

The report said the price hikes for some goods were much greater.

It said this year’s big increases on most commodities have come at a time the local currency has appreciated substantially.

“The exchange rate for the Iraqi dinar vis-à-vis the dollar has firmed. The dollar’s average value has been 1266 dinars this year compared with 1477 last year,” the report said. The sharp rise in annual inflation rate is due to surges in prices of most commodities the bureau includes in its inflationary index.

Fuel prices, it said, have gone up more than 70% this year in a country holding massive oil reserves.

Iraqi oil production has increased but the country’s refining capacity barely meets half of domestic needs estimated at 700,000 barrels a day.

Rents went up by nearly 30% with sharpest increase reporting in transport where prices rocketed more than 70%, the report said.

Pharmaceuticals rose more than 11%, clothes and shoes 8% and food more than 13%.
Analysts are somewhat bewildered as generally a firmer currency curbs inflationary pressure as almost all commodities covered in the bureau’s index are imports.
Iraq imports most of its food, most of its fuel needs and almost all its medical and pharmaceutical supplies.

The hikes are certain to make it increasingly difficult for Iraqis to make ends meet amid lack of security and rampant unemployment.

The government, embroiled in political and factional squabbling and an all out war to quell a murderous insurgency in certain parts of Iraq has no plans in place to quell fears of further hikes