July 11 (Bloomberg) -- Pakistan's inflation accelerated to
a 30-year high in June, increasing speculation that the central
bank may raise interest rates as early as this month.
Consumer prices in South Asia's second-largest economy
jumped 21.53 percent from a year earlier after gaining 19.27
percent in May, the Federal Bureau of Statistics said in
Islamabad today. Economists were expecting a 20 percent gain.
Governor Shamshad Akhtar has unexpectedly increased the
State Bank of Pakistan's benchmark interest rate twice this year
to 12 percent, the second-highest in Asia. That's yet to have an
impact on inflation, which the central bank says is being driven
by ``heavy'' government borrowings to fund its budget deficit.
Consumer price gains averaged 12 percent in the year ending
June 30, from 7.8 percent in the previous 12 months, according
to today's Federal Bureau re****t. Governor Akhtar and her
colleagues are due to release their next monetary policy
statement later this month.
The central bank in June said government borrowing from the
State Bank, estimated at 9 percent of gross domestic product
last fiscal year, ``cannot be sustained'' without further
stoking inflation.
Pakistan's budget deficit reached a 10-year high of about 7
percent of GDP in the 12 months to June 30, according to Finance
Minister Naveed Qamar. The nation's first civilian government
since a 1999 military coup says it wants to narrow the gap to
4.7 percent of GDP next fiscal year.
Prices also increased after the government raised domestic
fuel prices five times in four months in line with global crude
costs. Pakistan im****ts about 85 percent of the oil it uses.
|
