Any significant rise in energy prices may impact improved inflation outlook, says Pakistan central bank

This file photo, posted on August 7, 2023, shows Pakistan’s central bank and State Bank Museum in Karachi. (Photo courtesy: Facebook/SBP)
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Updated 14 May 2024
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Any significant rise in energy prices may impact improved inflation outlook, says Pakistan central bank

  • The bank says it is important for the government to set inflation target range in consultation with it
  • However, its latest report finds gaps in collective and up-to-date understanding of inflation dynamics

KARACHI: Pakistan’s central bank has warned that any significant increase in energy prices may offset the impact of recent positive developments on the inflation outlook, urging the government to set an inflation target range in consultation with it.

The State Bank of Pakistan (SBP) said it had revised its inflation projection range to 23–25 percent for the current fiscal year against the target of 21 percent after the inflation hit all-time high of 38 percent in May last year, and had taken measures during the ongoing high inflationary episode to contain demand pressures and prevent de-anchoring of inflation expectations. 

The central bank cumulatively raised the policy rate by 1,500 basis points during FY22 and FY23 and maintained it at 22 percent as adjustments in energy prices, in the backdrop of longstanding structural issues, continued to impact inflation outturns. As a result of monetary tightening, supported by some fiscal consolidation, lower global commodity prices, and improved domestic crop output, the inflation came down from its peak of 38 percent to 29.7 percent in December 2023, whereas core inflation has also gradually started to decelerate. 

“Any significant increase in administered energy prices may offset the impact of positive developments on inflation outlook,” the central bank warned in its half-yearly report issued on Tuesday.

Higher input costs, increase in indirect taxes, and implementation of upward revision in minimum wage announced in the FY24 budget, alongside the second-round effects of administered prices of food and energy items, were responsible for the persistence in the core inflation during the first half of fiscal year 2023-24 (H1-FY24), according to the report.

“Despite subdued domestic demand and decline in global commodity prices, a combination of lingering structural issues, PKR (Pak Rupee) depreciation compared to H1-FY23, increase in government spending, and supply shocks kept the National CPI inflation at elevated levels,” it read.

The central bank also warned that its 23-25 percent inflation outlook may also be at risk due escalating geopolitical tensions, unfavorable weather conditions, adverse movements in global oil prices, and subsequent external account pressures, saying that it expected inflation to come down to 5–7 percent by September 2025.

To effectively anchor inflationary expectations, the central bank said: “It is important that the government sets the inflation target range in consultation with the SBP — ala the practice of joint agreements between the government and central bank in other countries, such as Canada, India and England.” 

It also necessitates that deviations from planned fiscal policies, including the setting of administrative prices, are neither significant in magnitude nor in timing to avoid affecting monetary policy credibility and stoking long term inflationary expectations, according to the report. 

It is imperative to relax the policy of price administration and to de-cap prices to help increase competition in the medium to long term and thereby lower inflationary pressure. While productivity growth is needed to improve supplies and lower per unit costs, there is also a need to significantly lower the pace of population growth to ease underlying demand pressures in the long term.

“There are gaps in collective and up to date understanding of inflation dynamics in the country,” the bank stated. “Plugging these gaps in understanding requires concerted efforts by academia, government institutions, and policy research institutes alike.”

Pakistan’s macroeconomic conditions somewhat improved during H1-FY24 and real economic activities moderately recovered against the contraction last year, while a $3 billion Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) helped reduce stress on external account, according to the central bank. Continued tight monetary policy stance and fiscal consolidation are expected to keep domestic demand in check, with modest economic recovery expected in the second half of FY24.

In the backdrop of improvements in business confidence, high frequency demand indicators since November 2023 and prospects for a good wheat production during FY24, the SBP projected real GDP growth in the range of 2-3 percent for the current fiscal year.


Pakistan chosen for WHO program offering free cancer drugs for children

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Pakistan chosen for WHO program offering free cancer drugs for children

  • Health ministry says Pakistan will start getting free medicines from next year
  • Each year, more than 8,000 children in Pakistan are diagnosed with cancer

ISLAMABAD: Pakistan has been selected to join a global initiative led by the World Health Organization (WHO) and St. Jude Children’s Research Hospital that will provide free, essential cancer medicines for children starting this year, the country’s health ministry said on Thursday.

The program, known as the Global Platform for Access to Childhood Cancer Medicines, aims to improve survival rates among children with cancer in low- and middle-income countries by ensuring reliable and equitable access to life-saving drugs.

“It is a matter of pride that Pakistan has been selected for this program in 2025,” Federal Health Minister Mustafa Kamal said in the statement. “This is a major milestone in ensuring free cancer medicines for children next year.”

Each year, more than 8,000 children in Pakistan are diagnosed with cancer, he continued. However, many are unable to receive timely or effective treatment due to limited drug availability, high costs and weak health care infrastructure.

The health minister noted that a large number of children die as a result of these gaps.

Kamal emphasized that Pakistan would fully utilize the support provided through the platform, calling it a unique opportunity to address local health challenges using global resources.

“Through this program, Pakistan can access international support to overcome domestic challenges in delivering timely and effective treatment,” he said.

The global platform, launched in 2022, is backed by a $200 million commitment from St. Jude and operates in coordination with WHO.

It supports countries in developing sustainable supply chains, treatment protocols and health care capacity to address childhood cancers. Pakistan is among a growing list of countries to be included as the platform scales up its outreach.


Family of detained Baloch rights activist moves Supreme Court against her arrest

Updated 12 June 2025
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Family of detained Baloch rights activist moves Supreme Court against her arrest

  • Dr. Mahrang Baloch has been held in a Quetta prison since she was arrested on March 22
  • She published a letter from jail in a US magazine, saying ‘speaking for justice is not a crime’

ISLAMABAD: The family of a detained Pakistani Baloch rights activists, Dr. Mahrang Baloch, filed a petition in Pakistan’s Supreme Court on Wednesday, seeking to overturn a provincial court ruling that upheld her arrest under public order laws, according to a local media report.

Baloch, a physician and a civil society activists, has been held at Quetta’s Hudda District Jail since March 22 after she participated in protests following a separatist militant attack on a passenger train in Balochistan.

She was arrested under the Maintenance of Public Order (MPO) law, a move her supporters described as part of a broader crackdown on nonviolent dissent in the restive province.

The petition, filed by her sister, argues that the detention is arbitrary and aimed at silencing peaceful activism.

“Nadia Bal­och, the sister of Dr. Mah­­rang Baloch, urged the Supreme Court on Wed­­nesday to set aside the April 15 order of the Balo­ch­istan High Court that rej­ected the plea against her detention under the Main­tenance of Public Order,” the English-language newspaper Dawn quoted from the petition.

The detained activist, who leads the Baloch Yakjehti Committee, also published a letter from prison in the US-based Time magazine this week, in which she asserted that “speaking up for justice is not a crime.”
Pakistani authorities have accused Baloch of promoting the narrative of separatist groups like the Balochistan Liberation Army (BLA) in public. However, her letter in the American magazine maintained the officials had not provided any evidence of her links with BLA or any other militant group while criticizing the authorities for blurring the line between militancy and peaceful protest.

Earlier this year, the Balochistan High Court dismissed Baloch’s initial challenge to her detention, advising her to seek administrative remedies instead of judicial relief.

Her sister’s petition has now asked the apex court to suspend that ruling and review whether constitutional protections such as habeas corpus were ignored in the previous judicial decision.
The Supreme Court has yet to announce when it will take up the case for hearing.
 


Pakistan urges global protection for Gaza’s children on World Day Against Child Labor

Updated 12 June 2025
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Pakistan urges global protection for Gaza’s children on World Day Against Child Labor

  • President Zardari says children in conflict zones need global aid, protection and justice
  • PM Shehbaz Sharif also calls for stricter enforcement of existing laws against child labor

ISLAMABAD: Pakistan on Thursday called for urgent international support for children in Gaza, warning that thousands face displacement, hunger and heightened risks of forced labor amid ongoing conflict.

The appeal was made by President Asif Ali Zardari in a statement issued on the World Day Against Child Labor, observed annually on June 12. He said children living in war zones must be at the center of the global child protection agenda.

“These children urgently need global aid, protection and justice,” Zardari said. “In conflict-affected regions such as Gaza, thousands of innocent children have been displaced, injured or orphaned by violence. Many face hunger, trauma and the risk of falling into child labor.”

While reaffirming Pakistan’s commitment to eliminating child labor domestically, the president urged governments, rights defenders, media, religious leaders and philanthropists to come together and protect vulnerable children everywhere.

Prime Minister Shehbaz Sharif, in a separate message, said Pakistan “stands shoulder to shoulder with the international community in the fight against child labor,” but noted that implementation gaps still exist.

“This day is a reminder that we must continue striving toward a future where every child grows up in a safe and prosperous environment,” he said.

Officials say child labor remains widespread in Pakistan, especially in rural and informal sectors, depriving millions of education and exposing them to exploitation.

Sharif urged stricter enforcement of existing laws, which prohibit child labor under Pakistan’s constitution and several key statutes.

Zardari emphasized that while Pakistan has introduced reforms and protection systems, including the National Commission on the Rights of the Child and child welfare bureaus, lasting change requires collective action.

“Child labor is a global challenge,” he said. “Governments and societies must work together to protect children from exploitation and ensure they grow up in dignity.”


Pakistan PM arrives in UAE for high-level talks on strategic cooperation

Updated 44 min 3 sec ago
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Pakistan PM arrives in UAE for high-level talks on strategic cooperation

  • PM Shehbaz Sharif is undertaking the visit on Sheikh Mohamed bin Zayed’s invitation
  • Trip comes as Pakistan strives to deepen trade, investment relations with Gulf nations

ISLAMABAD: Prime Minister Shehbaz Sharif arrived in Abu Dhabi on Wednesday for a daylong official visit to the United Arab Emirates at the invitation of President Sheikh Mohamed bin Zayed Al Nahyan, the Pakistani government said.

Sharif was received at Al Bateen Airport by the UAE president’s brother and national security adviser, Sheikh Tahnoun bin Zayed Al Nahyan, who accompanied him to the presidential palace.

UAE’s Secretary General of the Supreme National Security Council, Ali Ahmed Al Shamsi, Pakistan’s Ambassador Faisal Niaz Tirmizi and senior embassy officials were also present at the airport.

“Prime Minister Muhammad Shehbaz Sharif has arrived in Abu Dhabi on a one-day official visit to the United Arab Emirates on the invitation of His Highness Sheikh Mohamed bin Zayed Al Nahyan,” the Prime Minister’s Office said in a statement.

The Pakistani delegation includes Deputy Prime Minister and Foreign Minister Ishaq Dar, Chief of Army Staff Field Marshal Syed Asim Munir, Interior Minister Mohsin Naqvi, Information Minister Attaullah Tarar and Special Assistant Tariq Fatemi.

The trip comes amid Pakistan’s broader efforts to strengthen strategic and economic ties with Gulf countries, particularly the UAE, which is its third-largest trading partner and a key source of investment and financial support.

The UAE has played a critical role in helping Pakistan navigate recent economic challenges, including through direct deposits into Pakistan’s central bank that supported an International Monetary Fund bailout.

According to a statement from Pakistan’s foreign office a day earlier, the prime minister is expected to follow up on more than $3 billion in cooperation agreements signed during his previous visit in January 2024, covering infrastructure, energy and investment.

Sharif and the UAE presidents are also expected to discuss regional security developments. Last month, the two leaders held a phone call during which Islamabad praised the UAE’s diplomatic role in de-escalating tensions between Pakistan and India after a military flare-up.


‘Bellicose punchlines’: Islamabad slams India’s top diplomat over anti-Pakistan remarks in Brussels

Updated 12 June 2025
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‘Bellicose punchlines’: Islamabad slams India’s top diplomat over anti-Pakistan remarks in Brussels

  • Subrahmanyam Jaishankar accused Pakistan of sponsoring ‘terrorism,’ asserted New Delhi’s right to retaliate
  • Foreign office says India should raise the quality of its discourse instead of remaining ‘obsessed with Pakistan’

ISLAMABAD: Pakistan on Wednesday criticized Indian External Affairs Minister Subrahmanyam Jaishankar for “producing bellicose punchlines” after he made a series of statements during his visit to Brussels, accusing Islamabad of sponsoring “terrorism” and asserting New Delhi reserved the right to retaliate against militant attacks.
The comments come in the wake of a recent military standoff between the nuclear-armed neighbors, involving the exchange of fighter jets, drones, missiles and artillery fire. Both countries have since launched parallel diplomatic offensives, dispatching delegations to major world capitals to present their versions of events.
New Delhi suspended a longstanding river water-sharing treaty following a gun attack on tourists in Indian-administered Kashmir that it blamed on Pakistan. Islamabad denied any involvement, calling for an impartial international probe before India decided to launch missiles to target what it called was “terrorist infrastructure” in Pakistan.
A US-brokered ceasefire was announced by President Donald Trump on May 10, followed by Pakistan’s call for a “composite dialogue” with its neighboring state which New Delhi has so far resisted.
“Pakistan categorically rejects the irresponsible remarks made by the External Affairs Minister of India during different media engagements in Brussels,” the foreign office said in a strongly worded statement.
“The discourse of top diplomats should aim to promote peace and harmony, rather than producing bellicose punchlines,” it continued. “The tone and tenor of a Foreign Minister should be commensurate with his dignified status.”
The ministry accused India of waging a years-long “malicious campaign” aimed at misleading the global community with a “fictitious narrative of victimhood,” adding that such rhetoric cannot conceal what it described as India’s own “sponsorship of terrorism beyond its borders” or its “state-sanctioned oppression” in Indian-administered Jammu and Kashmir.
“India must also desist from concocting misleading narratives to justify its recent aggressive actions,” the statement said. “Pakistan believes in peaceful coexistence, dialogue and diplomacy. However, it stands resolute in its intent and ability to safeguard its sovereignty against any aggression, as exemplified by its robust response to India’s reckless strikes last month.”
Calling India’s recent remarks a sign of “sheer frustration” after what it termed an “unsuccessful military adventure,” Islamabad said Indian leaders should focus on improving the quality of their discourse rather than remaining “obsessed with Pakistan.”
“The history will judge not by who shouted the loudest but by who acted the wisest,” it added.