6.8pc inflation recorded in Jul-March: Senate told

ISLAMABAD: Minister of State for Finance and Revenue Hammad Azhar on Thursday informed  the Senate that the inflation (CPI) in July-March of FY 2019, remained at 6.8 per  cent which was within single digit range.

During the Question Hour, the Minister pointed out that the increase in the  price level was due to rising international oil prices and rupee depreciation.

He said the government was cognizant of this challenge and was following  prudent expenditure management and contractionay monetary policy to anchor  expected rise in inflation.

He said to anchor expected rise in inflation, State Bank had also further raised  the policy rate to 10.75 effective from April 1st, to compress the aggregate demand  in the economy.

The minister said the government had made all-out efforts to bring down inflation by ensuring smooth supply of commodities, checking profiteering and hoarding and vigilant monitoring of prices, both at federal and provincial levels.

The government was also committed to shift the burden of adjustments on  those who could afford, rather than the poor segment of the society, he added.

He said Ramazan Bazaars have been set up in various areas to provide relief  to the masses.

To another question, the minister said the preceding year witnessed a growth  of 5.22 percent but broadly it was consumption-led growth. A persistent increase  in fiscal deficit added demand pressure which compounded the size of external current account deficit to an unprecedented level, that weighs on growth projection  of 6.2 percent at the start of current fiscal year, he added.

He said after assuming office, the incumbent government had started focusing  on stabilization measures to address vulnerabilities and macroeconomic imbalances to put the economy on a sustainable growth path.

Macroeconomic adjustments of monetary policy tightening, exchange rate adjustments, reduction in PSDP spending and regulatory measures had started moderating the aggregate demand in country, he added.

The minister said economy was responding to stabilization measures as  explained by contraction in Large Scale Manufacturing (LSM) which recorded negative growth of (1.72 percent) in July-February FY 2019 compared to the  growth of 6.59 percent of the corresponding period last year.

In the agriculture sector, the minister said the production estimates of major  crops were not encouraging. Weak performance of commodity-producing sectors  also tends to have a negative impact on the services sector, he added.

Hammad Azhar said to revamp the fundamentals of economy, a relative  slowdown in economy for some time was inevitable in order to reach the path  of sustainable growth and to control the fiscal and external sector imbalances.

The minister said IMF Country Director was eager to meet political leaders  but no one except Syed Naveed Qamar, turned up.