ISLAMABAD: State Bank of Pakistan (SBP) Deputy Governor Dr Murtaza Syed on Thursday said Pakistan will likely achieve its 5-7 per cent inflation target by the next fiscal year due to a beneficial base effect and tightening of macroeconomic policies.

Speaking about inflation during a Zoom session organised by the World Bank and Tabadlab, the SBP deputy chief said inflation doubled from 13-14 per cent to about 25-27 per cent since June on the back of an increase in fuel prices.

Pakistan does have an inflation problem, but more recently it has started to come down and it registered “more than expected” decrease in the last month, he added.

According to Dr Syed, inflation has “kind of peaked” and would start to decline for the rest of the current year.

The SBP deputy chief also termed fears about Pakistan’s economic outlook “exaggerated” and said Pakistan was over-financed by at least $10

billion as a result of inflows from friendly countries and pledges made by development partners in the aftermath of floods.

The central bank official said that the external financing needs of Pakistan were around $31 billion while available financing was $37 billion — $6 billion more than the country required. “However, this is before taking the floods into account,” he said, adding that the recent floods may have some effects on the current account deficit.

Published in Dawn, October 7th, 2022