Inflation in Pakistan bound to rebound

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Inflation in Pakistan bound to rebound

ISLAMABAD: Pakistan inflation will accelerate to 4 percent in the current fiscal year while in next fiscal year it would be around 4.8 percent on back of rebound in crude oil and commodity prices, said an Asian Development Bank report.

The report released on the Asian economies highlighted that following the rise of at inflation rate, the central bank or State Bank of Pakistan need to be vigilant. 

The central bank need to readjust and monetary policy would be accommodative if inflationary pressures intensify.

Another important point highlighted by the ADB that beside rise in commodity prices government’s borrowing from the State Bank of Pakistan increased sharply. The latest figures revealed that government borrowings from the SBP increased to Rs 1000 billion.

Another highlighting feature of the report was the observation of the ADB that fiscal deficit widened because of higher expenses and lesser revenue collection. 

ADB said the government has to take some stringent measures to overcome the overall deficit. 

They could bank on expected inflows from the CSF which has been delayed so far and through the auction of 3G license. 

The government could mitigate through higher oil prices which has been passed to consumers to boost indirect taxes.