ISLAMABAD: Pakistan’s headline annual inflation was recorded at 3.2 percent in February 2015 over the corresponding period last year while the previous lowest level of inflation was 3.1 per cent back in 2002-2003.
The national economy is likely to slow further in the next few quarters. An expert said that the country was already witnessing deflation from last few months.
As per the Pakistan Bureau of Statistics (PBS) figures, average inflation in first eight months (July-February) of the ongoing fiscal year remained at 5.5 percent over the corresponding period last year. Meanwhile, the sensitive price indicator (SPI) increased by 2.77 percent in July-February 2014-2015 as against the same month of last year.
He said, “Pakistan has landed into deflation, as inflation rate measured by the changes in Wholesale Price Index (WPI) is already showing negative growth. The domestic demand of commodities has gone down due to the purchasing powers of the people, as they could not buy things. Therefore, prices of the commodities are persistently declining.”
Meanwhile, the State Bank of Pakistan (SBP) had recently cut the interest rate by one percent to 8.5 percent due to the continuous decline in inflation rate. It has also noted that inflation would further decline in the months to come. The SBP has revised downwards its forecast range for average CPI inflation to 4.5-5.5 percent for FY15, well below the annual target of 8 percent.
