Pakistan Aims Reduce Inflation to Single Digits by Next Year
Pakistan expects inflation next fiscal year to be reduced to single digits, bringing stability to the rupee, Minister for Finance & Economic Affairs, Shaukat Tarin, told CNBC on Friday.
"Hopefully by next fiscal (year), we should be in single digits, 6-7%," Tarin said. When that happens, the country's central bank will look at reducing interest rates, he added.
The central bank left rates unchanged last week at 12.5%, a move that Tarin says is good, but cautious.
“They should have reduced (rates) when inflation was around 9% a month before that, but they have kept rates there because they believe it will go up to 11 - 11.5%. So they like to keep the positive interest rates.”
When it comes to attracting foreign investment into Pakistan, Tarin sees investments in oil and gas, banking and telecoms.
“I think we're looking at a fools' paradise. We should keep working to remove the security threats, keep working to improve economic fundamentals but that will take 3-4 years for people to come back.”
Pakistan’s economy has been struggling as it battles militants in the northwest. The government recently nudge up gross domestic product growth for the fiscal year at 3.4 percent, compared with an earlier estimate of 3.3 per cent.
The International Monetary Fund agreed in late 2008 to lend Pakistan $7.6 billion to help the nation avert a debt crisis.