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| State Bank revises inflation target for fy15 |
KARACHI: The State Bank of Pakistan (SBP) has further revised the inflation target for the fiscal year 2014-15.It is now projected to be in the range of 4.5 to 5.5 per cent against the annual target of 8pc. The bank attributed low inflation to falling oil prices primarily.
The central bank issued the first quarter (July-September) report on Tuesday which says the inflation is likely to end up much lower than initial expectations, as government has steadily been reducing retail POL prices in line with international prices.
Headline inflation reached 13-year low of 4pc in November and 4.3pc in December, pushing down the July-December inflation to only 6.1pc, against the full-year target of 8pc.
In addition to fuel prices, low inflation was realised by deflation in some key food items, like wheat, wheat flour, onions and tomatoes, said the report, adding that households anchor their inflation expectations on energy and fuel prices.
“Based on these factors, we expect the full-year inflation to stay within the range of 4.5-5.5pc in FY15,” said the SBP report.
The report also said the prospects of achieving the FY15 GDP growth target was hindered by a slowdown in Large Scale Manufacturing (LSM) and a below-target performance of Kharif crop.
The government envisaged GDP growth of 5.1pc for FY15.
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