IMF predicted inflation rate to strike at 14% by June 2019

ISLAMABAD: The International Monetary Fund (IMF) has predicted that the standard inflation rate in Pakistan may strike to 14% by June 2019, such inflation rate will lead to higher interest rates to almost 15% which will affect the economy significantly.

It is observed that such elevated stage of inflation can effect Prime Minister Imran Khan’s most determined flagship programme of constructing five-million low-cost housing units.  To complete such planning banks lend money over and above the policy rate, which will diminish the government’s options to give financial support on housing loans.

According to sources, taking actions for stability are vital in such position, IMF has also proposed economic growth rate of below 3% for fiscal year 2018-19.

These reports related to Pakistan economic assessments were shared with Pakistan during September 27 to October 4 staff level visit.

Furthermore, according to report, IMF has not declared the inflation projections in its brochure, these results are shared at internal levels stating average 14% inflation in fiscal year 2018-19 with the Finance Ministry, said sources who negotiated with the IMF.

During the meeting between Finance Minister, Asad Umar and IMF team, the subject of inflation and the Gross Domestic Product (GDP) also came up as one of the main discussions. This meeting was held in Q-Block on last Thursday.

According to the handout issued, IMF highlighted that “economic growth will likely sluggish significantly, and inflation will increase”.

The data according to the Pakistan Bureau of Statistics (PBS), reveals that the average inflation in the first quarter of this fiscal year was 5.86%.

The Sensitive Price Index-based inflation has already plunged to 6.5% this week over the same time as of 2017.

The State Bank of Pakistan (SBP) has also augmented its average inflation bulge to 8%, which is still stumpy as compared to the propsal provided by IMF’s assessment.