RECORDER REPORT
KARACHI: The State Bank of Pakistan has projected that the average inflation rate for the year will remain within target.
According to SBP second quarterly report, headline inflation, which had been declining since the beginning of the current fiscal year, reached a low of 6.9 percent in November 2012 (YoY).
Accordingly, average inflation for the first half of FY13 fell to 8.3 percent against 10.9 percent in the corresponding period last year. This visible decline was primarily because of the stability in food prices, downward revisions in the price of piped gas and CNG, and softening inflationary expectations, the report said.
"In our view however, the declining trend in inflation seems to have bottomed out as YoY headline inflation increased to 7.4 percent in February 2013 and this reversal can be explained by the increase in wheat support prices, and the continuous expansion in money supply," it added.
However, the report said that end of FY13 CPI inflation will be 8-9 percent against the target of 9.5 percent.
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