Inflation rate to be brought down to 10pc by June: Tarin

[LahoreEstate]

Tuesday, March 10, 2009

By Faryal Najeeb

KARACHI: Adviser to the Prime Minister on Finance Shaukat Tarin has said inflation rate would reduce to 10 per cent by June 2009 whereas by the beginning of next year, it is expected to slide down to 6 per cent whilst interest rates are also expected to decline to 6 or 7 per cent during the same period.

Addressing businessmen at the residence of the Karachi Chamber of Commerce and Industryís President, Anjum Nisar on Monday evening, Tarin commented that it was essential to bring down the inflation and interest rates systematically and not immediately as otherwise the economy would suffer further as a renewed hyperinflation may occur following the sudden dip in interest rates.

He said until October 2008 the economic crisis had been so bad that people had feared freezing of their lockers. Tarin pointed out that over the past five months inflation had been controlled and reduced significantly whereas the KIBOR rate had also declined by 3.5 per cent. He said the vision was to take inflation rate down to as low as 3-4 per cent by June 2010.

He highlighted that the Pakistani banks and rupee are also more stable now compared to some months back which was a positive sign of the local economyís revival. Tarin said the countryís exports are falling due to several reasons of which global recession is pivotal.

He said if the exports were declining so were imports as the entire international economic scenario was extremely volatile. He said due to this, the trade deficit of the country was contracting.

The adviser said the local industries were fragmented and when ìyou are competing with the best of the best in the world, you should also be competitive enoughî. He continued to say that local businessmen should look for new markets and also introduce new products rather than depending on old traditional items.

http://www.thenews.com.pk/top_story_detail.asp?Id=20860