Steps needed to cut down inflation: report

According to the State Banks of Pakistan’s third quarterly report for fiscal year 2011, in overall terms, although the post-flood hike in CPI inflation has largely dissipated, inflation is stubborn, in excess of 13 percent due to the lagged impact of government borrowings from the SBP, frequent upward adjustments in utility and POL prices, increase in commodity prices and the rising trend in the House Rent Index (HRI).The report further said that the impact of the widening fiscal deficit was clearly visible in sharply rising domestic debt. Outstanding government domestic debt reached Rs 5,594 billion that was about 31.8 percent of GDP.In addition, the maturity profile of domestic debt reveals that the government has to roll over the entire stocks of Rs 2854 billion of short term debt at least once a year.In the context of a sustainable energy policy, feasible alternatives to furnace oil for power generation need to be developed. Furthermore, the potential role of imported gas is unquestionable in the medium term and policy emphasis must be directed towards developing the necessary infrastructure to use imported gas, the report said.