ISLAMABAD – Mainly because of the tumbling oil prices from last several months, the inflation rate went down to 3.9 per cent in January 2015 over the corresponding period of last year.
Measured by the consumer price index (CPI), the country’s headline monthly inflation is fluctuating around 4 per cent from last three months only due to the continuously declining oil prices. The inflation rate remained at 3.9 per cent in January 2015, 4.3 per cent in December 2014 and 3.9 per cent in November 2014.
As per a Finance Ministry’s official, “There is no other main reason behind lower inflation rate except petroleum products prices, which is constantly reducing in the country. Inflation would remain below the government’s target by the end of ongoing financial year.”
The State Bank of Pakistan (SBP) had recently cut the interest rate projection by 1 per cent to 8.5 percent due to the continuous decline in inflation rate. The SBP had 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 per cent.
