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Sharp increases in prices of items like onions cannot explain the inflation trends because in early 2019 the country also experienced a collapse in rice prices, which occupy a much higher weight in the consumer basket, Hussain said.

With import growth lagging well behind GDP growth, the increase in cost of imports due to exchange rate depreciation can also not explain why the headline inflation in most months remained above 5.5 percent and non-food inflation closer to 6 percent.

“Clearly, the economy was overheating with aggregate demand boosted by sharp increases in public sector borrowing and remittances. Supply chain disruptions such as strikes by transport operators may also have contributed to price spikes at different times of the year,” Hussain said.

The cost of living rose 5.50 percent year-on-year and the prices of goods and service went up by 6.08 percent last year, the CAB said.

The government has targeted a 5.5 percent inflation rate for this fiscal year. It was able to contain it at 5.48 percent in fiscal 2018-19, which is comfortably below the target of 5.6 percent.