Core Inflation Should Ease Towards End-09

Iraq's core inflation rate picked up in August, driven by rising food prices (in Iraq, core inflation includes food), but now the holy month of Ramadan has passed, price pressures should ease over the coming months. According to a Central Bank of Iraq (CBI) statement, core inflation came in at 10.8% y-o-y in August, up from 7.9% in July. Based on these figures, we calculate that core inflation rose by 3.8% m-o-m in August, the largest monthly jump since April 2008. This was driven by sharply increasingly food prices, which according to the statement rose by 12.3% m-o-m in August.

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