Pakistan Rate Unchanged

The State Bank of Pakistan decided to keep the interest rate unchanged at 5.75%, according to a press release, APP reported. It said, prospects of achieving the 6% target of real GDP growth continue to be strong due to the availability of cheaper money and higher credit off-take by the private sector. The SBP said economic activity is strong as corroborated by broad-based pick-up in the industrial output, gains in factors supporting the production of major crops and growth in private-sector credit. The interest rate has been kept unchanged since May 2016. “Model-based projections for inflation and survey-based measures of inflation expectations show that in 2017-18 overall inflation is expected to remain well below the target of 6%,” said the SBP. The central bank believes that inflation is expected to fall inside the range of 4.5-5.5% projected at the start of 2017-18. The bank said healthy growth in the tax collection by the federal board of revenue during the first quarter of 2017-18, 22% compared to the modest 4.5% during the first quarter of 2016-17, is a welcome development.