State of the economy

According to the State Bank of Pakistan’s latest report, inflation has almost doubled in July-April of fiscal year 2018-19, compared to the corresponding period of the last financial year. The average headline Consumer Price Index inflation reached 7 percent in July-April of fiscal year 2018-19 compared to 3.8 percent in the same period last year. Moreover, the annualised headline month-to-month inflation has risen considerably in the last three months due to recent hike in domestic fuel prices and rising food prices and input costs. As such, inflationary pressures are likely to continue for some time. Furthermore, the average headline CPI inflation is expected to be in the range of 6.5 percent to 7.5 percent in financial year 2018-19 and it is anticipated to the considerably higher in fiscal year 2019-20.

Estimates show that economic growth is expected to slow in 2018-19 but will rise modestly in the fiscal year 2019-20. This slowdown is mostly due to lower growth in agriculture and industry.

Khan Fraz

Peshawar