Inflation: SBP says it only issues forecasts

KARACHI: The State Bank of Pakistan (SBP) Monday said that it only issues forecasts and does not fix the inflation target.

According to the SBP, in some sections of the media, the SBP’s average inflation forecast of 7-9 percent in FY22 is being interpreted as the ‘inflation target’ and being compared to the inflation targets of other countries. This is incorrect.

SBP hikes rate by 150bps to 8.75pc on inflation, BoP

The SBP’s inflation forecast represents our projections for the current fiscal year. On the other hand, Pakistan’s inflation target is set by the government, which is 5 to 7 percent right now.

This target is to be achieved over the medium term. The monetary policy is anchored on achieving the government’s inflation target over the medium term, ie, over the next 18-24 months.

Copyright Business Recorder, 2021