Finance Divisions admission: inflation exceeds regional average

The government has admitted that inflation in Pakistan is higher than the regional average, except Bangladesh, it is reliably learnt. Sources said the Finance Division during a briefing to the ECC of the Cabinet on key economic indicators acknowledged that despite the fact that monthly inflation in Pakistan declined to single digit in December 2011, it was still considerably higher than the regional average, except Bangladesh.
An official of the Finance Division was quoted as saying that a regional comparison suggested that inflation was recorded at 9.7 percent in December 2011 over the same period of last year compared to 7.5 percent in India for the same month; Sri Lanka and China registered inflationary rate of 4.9 percent for December and 4.2 percent for November respectively. However, the meting was informed that 10.6 per cent inflation for the month of December 2011 in Bangladesh was higher than Pakistan.
The official briefing the meeting noted that the reported stock of wheat as on January 11, 2012 is 6.9 million tons showing sufficient quantity of local wheat available for daily releases to mills by Provincial Food Departments and Passco. The total reported stock of sugar in the country as on 12 Jan, 2012 was slightly over 1,210,337 metric tons, compared to 968,672 metric tons last year while stock of various petroleum products averaged 20 days on January 18, 2012 compared to 13 days on January 18, 2011.
The economic managers revealed that economic indicators depicted mixed signs with production in the Large Scale Manufacturing (LSM) sector at -1.5 percent in October 2011 as compared to -2.8 percent in the same period last year. The officials said that an increase in output in automobiles (buses and cars & jeeps), refrigerators, cotton yarn, cotton clothes, paper and board and vegetable ghee are the principal contributing sectors to the overall rise in LSM. The meeting was informed that export growth was significantly less than import growth during July-December 2011, which widened trade deficit to $7.6 billion.
The ECC was informed that workers' remittances amounted to $6.325 billion in July-December 2011-12 compared to $5.291 billion for the same period of last year, reflecting an increase of 19.5 percent. Saudi Arabia, UAE, and UK are the largest source of increase in worker's remittances.
Gross Foreign Exchange Reserves (including FCA deposits with scheduled banks) stood at $16.6 billion as on January 18, 2012. The FBR tax collection stood at Rs 840 billion on a net basis during July-December 2011 as compared to Rs 662 billion in the same period last year, thereby posting an increase of 27 percent. The ECC was informed that Foreign Direct Investment (FDI) for July-December stood at $531 million, against $840 million in the same period of 2010-11, thereby depicting a decline of 37 percent.