Across the border

The grim economic situation finds echo across the borders in Pakistan too.Pakistan's inflation accelerated to a 30-year high in June.Consumer prices in South Asia's second-largest economy jumped 21.53 per cent from a year earlier after gaining 19.27 per cent in May, the Federal Bureau of Statistics said in Islamabad yesterday. Economists were expecting a 20 per cent gain.Governor Shamshad Akhtar has unexpectedly increased the State Bank of Pakistan's benchmark interest rate twice this year to 12 per cent, the second-highest in Asia. That's yet to have an impact on inflation, which the central bank says is being driven by "heavy" government borrowings to fund its budget deficit.Consumer price gains averaged 12 per cent in the year ending June 30, from 7.8 per cent in the previous 12 months, according to yesterday's Federal Bureau report. The average annual inflation is the highest since 1995, Eslam said.
Akhtar and her colleagues are due to release their next monetary policy statement later this month.Pakistan's budget deficit reached a 10-year high of about seven per cent of GDP in the 12 months to June 30, according to Finance Minister Naveed Qamar.