Gilani sees no threat to govt

Says ‘Q’ assures support to government

BHERA: Prime Minister Syed Yousuf Raza Gilani has reiterated that government is not facing any threats and rather will complete its constitutional term. He was talking to media at Bhera Services Area while commuting between Lahore and Islamabad via motorway on Tuesday.
During the course of his conversation, he said that PPP is a national party and it will complete its term. Time demands from all political parties who believe in democracy to collectively solve the crises.

PM also said country is facing terrorism threats other than inflation and unemployment that we received in inheritance. He said finance ministry is briefing leaders of all parliamentary parties related to recent increase in petrol prices. He said terrorism and floods are among the other contributors to inflation, which we are trying to cope with.
While responding to a question, PM said Ch. Shujaat Hussain has ensured him to support government for the eradication of inflation and to improve law and order situation.
He further said we are trying to remove all reservations of JUI-F and MQM and added that Fazl-ur-Rehman left coalition because of dismissing Azam Swati whereas MQM holds reservations with Home Minister Sindh Zulfiqar Ali Mirza.
It has also been learnt that during his stay in Bhera, member of PML-N’s central committee Barrister Pir Farooq Bahadur-ul-Haq Shah met PM Gilani and extended a special message.-Agencies 

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Posted in: Ali,inflation,Minister,MQM,PM,PM Gilani,PML,Shujaat Hussain,support,that,threat,threats

Dec CPI may touch 17.1pc

Inflation likely to cross 19-month high

Aamir Abidi

KARACHI: The disruption in supply of food chain along with increasing commodity prices is expected to cause December 2010 consumer price index (CPI) inflation to jump at 17.1 per cent YoY, pushing MoM CPI inflation to 0.93 per cent. Perishable foods items i.e. tomatoes, egg, vegetable ghee prices increased 98.6, 5.64 and 3.13 per cent MoM along with that of non-perishable food items i.e. wheat & rice prices hiked 0.53 and 0.57 per cent MoM.

On the other hand, SBP tightening is diluting the effectiveness of monetary policy due to high-level of government borrowing from the SBP. While rising security and flood-related expenditures and continued power sector subsidies are one aspect of the problem of rising fiscal deficit and ultimately rising inflation.
Of the Rs398 billion expansion in M2 till 18th December 2010 during the current fiscal year, Rs305 billion is due to government borrowing from the SBP, which has been on an increasing trend since September 2010. Such borrowing has stoked expectations of increasing inflation.
Furthermore, higher Net Domestic Assets (NDA) to Net Foreign Assets (NFA) ratio and its strong association with CPI inflation also suggest that the inflation is likely to persist at double digit levels during FY11 i.e. full year CPI expectation of 15.5 per cent. Furthermore, delay in implementation of RGST and uncertainty in timing of foreign inflows may force SBP to increase discount rate by 50bps to 14.5 per cent.

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Posted in: cent,CPI,December,fiscal,food,inflation,MoM,prices,rising,SBP,that

Rising oil price adds to Asia inflation headaches

Rising oil prices present a new inflationary headache for Asia and further complicate the task of policymakers grappling with broader price pressures, an uneven growth outlook and surging dollar inflows. Central bankers in Asia are reluctant to stifle growth by raising rates and are wary of exacerbating yield differentials with western economies and Japan that would further attract potentially destabilising capital flows.

At the same time, rising prices are politically fraught in countries such as India and Indonesia, which must decide between taking the fiscal hit of offsetting fuel price increases through subsidies or pass costs onto inflation-wary consumers.
Inflation is also a big worry for global economic powerhouse China, whose leadership perceives rising costs of living as a threat to social peace and stability.
Beijing’s Christmas day rate rise — its second in two months — underscored how its focus has shifted from nurturing growth to getting prices under control and India is expected to follow, resuming a tightening cycle that has brought six rate increases since March.

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Posted in: Asia,China,demand,food,growth,India,inflation,price,prices,that