Inflation driving factors started to ease: SBP

KARACHI: State Bank of Pakistan (SBP) has said that due to decrease in dollar value against Pakistani rupees (PKR) and some other factors, a significant decrease in inflation had been recorded and if government does not announce an increase in gas tariffs the prices would remain stable during rest of the current fiscal year.

In its second quarterly report about fiscal year 2013-14, the bank said that some of the factors driving inflation in the first half of the fiscal year had started to ease. For instance, the pressure on PKR had eased.

The report said that the stability in food inflation pulled down to 7.9 percent in January 2014, from 9.2 percent in December 2013. “Based on these factors, we project inflation to fall in the range of 8.5 to 9.5 percent during fiscal year 2013-14,” the report said. It added: “There are, however, risks that the government may announce an increase in gas tariffs which would put pressure on inflation.

The report said that inflation continued to increase in second quarter of the fiscal year and reached an average of 9.7 percent in the quarter, from 8.1 percent in first quarter of the fiscal year. In overall terms it rose to 8.9 percent during first half of current fiscal year compared to 8.3 percent in first half of last fiscal year.

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