Transcribed

Pakistan - Weighted contribution to CPI imflation, Interest rates

3.20.9 Weighted contribution to CPI inflation Food Clothing and footwear Housing, water, electricity, gas, and other fuel Transport Education Core Others Consumer price index % 100_ _15 80_ _12 60. 9 40_ 6 20 3 0. Jan Apr Jul Oct Feb 2012 2013 CPI= consumer price index. Source: State Bank of Pakistan. Economic Data. http://www. sbp.org.pk (accessed 5 March 2013). 3.20.10 Interest rates Repo rate Reverse repo rate Weighted average lending rate % 16_ 14_ 12_ 10_ 8_ Jan Apr Jul Oct Jan Apr Jul Oct Jan 2011 2012 2013 a On gross disbursements, the amounts disbursed by banks either in Pakistan rupees or foreign currency against loans during the month. Also includes loans repriced, renewed, or rolled over during the month. In case of running finance, the disbursed amount means the maximum amount received by the borrower at any point during the month. Sources: State Bank of Pakistan. http://www.sbp.org.pk; CEIC Data Company (both accessed 21 March 2013). 3.20.9 Weighted contribution to CPI inflation Food Clothing and footwear Housing, water, electricity, gas, and other fuel Transport Education Core Others Consumer price index % 100_ _15 80_ _12 60. 9 40_ 6 20 3 0. Jan Apr Jul Oct Feb 2012 2013 CPI= consumer price index. Source: State Bank of Pakistan. Economic Data. http://www. sbp.org.pk (accessed 5 March 2013). 3.20.10 Interest rates Repo rate Reverse repo rate Weighted average lending rate % 16_ 14_ 12_ 10_ 8_ Jan Apr Jul Oct Jan Apr Jul Oct Jan 2011 2012 2013 a On gross disbursements, the amounts disbursed by banks either in Pakistan rupees or foreign currency against loans during the month. Also includes loans repriced, renewed, or rolled over during the month. In case of running finance, the disbursed amount means the maximum amount received by the borrower at any point during the month. Sources: State Bank of Pakistan. http://www.sbp.org.pk; CEIC Data Company (both accessed 21 March 2013).

Pakistan - Weighted contribution to CPI imflation, Interest rates

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Consumer price inflation continued a downward trend during most of the first 8 months of FY2013 as food price inflation decelerated. However, year-on-year inflation at 7.4% in February 2013 was higher... than the year low of 6.9% in November 2012 as food prices moved higher (Figure 3.20.9). Nevertheless, food inflation in this fiscal year is much slower than a year earlier, reflecting improved supply. Core inflation, excluding food and energy, also improved but, at 9.6% in February 2013, remains stubbornly high with many of its subcomponents staying in double digits, reflecting entrenched inflationary pressure in the economy. However, with slower growth in food and energy prices, inflation is expected to average 9.0% in FY2013, or 2 percentage points lower than in the previous fiscal year. On the expectation that there will be no substantive improvement in the country’s fiscal and energy imbalances in FY2014, inflation is expected to edge up to 9.5%. Easing inflation early in FY2013 prompted further reductions in the central bank’s main policy rate by a total of 250 basis points, bringing it to 9.5% in December 2012 (Figure 3.20.10). While banks’ weighted average rate on new loans in this period fell by about 200 basis points to 11.3%, overarching constraints coming from energy shortages and other uncertainties, such as law and order issues, will limit the impact of interest rate reductions on investment and business conditions in general. A modest increase in lending to private businesses in the first 7 months of FY2013 was mainly for working capital, with the bulk of lending going to textile firms. Sources:State Bank of Pakistan. http://www.sbp.org.pk; CEIC Data Company (both accessed 21 March 2013)

Pakistan - Weighted contribution to CPI imflation, Interest rates

Pakistan - Weighted contribution to CPI imflation, Interest rates

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