6.8 per cent inflation recorded in Jul-March: Senate told.
ISLAMABAD -- Minister of State for Finance and Revenue Hammad Azhar on Thursday informed the Senate that the inflation (CPI) in July-March of FY 2019, remained at 6.8 per cent which was within single digit range. During the Question Hour, the Minister pointed out that the increase in the price level was due to rising international oil prices and rupee depreciation. He said the government was cognizant of this challenge and was following prudent expenditure management and contractionay monetary policy to anchor expected rise in inflation. He said to anchor expected rise in inflation, State Bank had also further raised the policy rate to 10.75 effective from April 1st, to compress the aggregate demand in the economy. The minister said the government had made all-out efforts to bring down inflation by ensuring smooth supply of commodities, checking profiteering and hoarding and vigilant monitoring of prices, both at federal and provincial levels.
The government was also committed to shift the burden of adjustments on those who could afford, rather than the poor segment of the society, he added. He said Ramazan Bazaars have been set up in various areas to provide relief to the masses. To another question, the minister said the preceding year witnessed a growth of 5.22 percent but broadly it was consumption-led growth. A persistent increase in fiscal deficit added demand pressure which compounded the size of external current account deficit to an unprecedented level, that weighs on growth projection of 6.2 percent at the start of current fiscal year, he added.
He said after assuming office, the incumbent government had started focusing on stabilization measures to address vulnerabilities and macroeconomic imbalances to put the economy on a sustainable growth path. Macroeconomic adjustments of monetary policy tightening, exchange rate adjustments, reduction in PSDP spending and regulatory measures had started moderating the aggregate demand in country, he added. The minister said economy was responding to stabilization measures as explained by contraction in Large Scale Manufacturing (LSM) which recorded negative growth of (1.72 percent) in July-February FY 2019 compared to the growth of 6.59 percent of the corresponding period last year. In the agriculture sector, the minister said the production estimates of major crops were not encouraging. Weak performance of commodity-producing sectors also tends to have a negative impact on the services sector, he added.
Hammad Azhar said to revamp the fundamentals of economy, a relative slowdown in economy for some time was inevitable in order to reach the path of sustainable growth and to control the fiscal and external sector imbalances. The minister said IMF Country Director was eager to meet political leaders but no one except Syed Naveed Qamar, turned up.