Inflation reined in to stay below 6% target

LAHORE: Consumer price index inflation remained well below the target of 6.0% and stood at 4.09% from July to April of Fiscal Year 2016-17 against 2.79% in same period of FY 2015-16.

The budget document said this was due to the increase in aggregate demand and a trend-reversal in global commodity prices.

The low inflation contributed to maintaining policy interest rate at 5.75%, which is again the lowest in decades. Interest rate has a turn resulted in expansion of private sector credit which witnessed a growth of 65% during the first 10 months of the FY 2016-2017, the document said. It added that fiscal deficit of the country came down to 4.2% of the GDP from 8.2% in 2012-13.  Admitting that the certain parts of the province, especially the southern regions, had suffered losses, the Punjab government said the provincial budget for 2017-18 was a conscious tilt in favour of these deprived regions. The objective was to reduce these imbalances.



“It is also extremely important for the province to pay attention to the southern regions of the province to achieve sustainable development goals,” the white paper of the budget said.

It added the development of trade channels, energy corridors and associated businesses under the China Pakistan Economic Corridor (CPEC) are some of the low hanging fruits that will only yield results if the government acts upon them by providing well-articulated policies. The document continued that special attention also needed to be paid to reviving historic trade routes..

Published in The Express Tribune, June 3^rd, 2017.