Iraq’s Central Bank expects the inflation rate to reach 7% in June, and pointed out that the increase of oil prices is one of the main reasons of inflation in the country.
Central Bank advisor Mazhar Mohammad Saleh told Al Sumaria TV that production of goods is weak in comparison to the services sector, which is booming.
Iraq bears the inflation caused by the raising prices of goods worldwide because it is an importing country and stressed that the increasing oil prices are causing inflation in spite of the revenues it is bringing to Iraq.
The political problem also affects the volume of inflation as it confuses expectations and creates a state of uncertainty, Saleh said. He added that Iraq produces very few goods, while services sector is booming, and this situation is being reflecting in the record prices.
Iraq Ministry of Planning and Development Cooperation announced last week that the inflation indicator increased in May 2011 compared with the previous month.
(Source: Al Sumaria TV)