However, the large increase in wages and salaries in the revised 2015 budget and lower administered prices
have boosted incomes.
The bulk of the monthly developments were driven by the upward adjustments in administered prices
, particularly tobacco, in addition to supply bottlenecks related to the distribution of butane cylinders.
The Government ever since assuming responsibilities embarked upon a process of deeprooted economic reforms, such as tax measures and adjustment in administered prices
, without which meaningful hope for economic revival was not possible, he added.
Although these issues have played themselves out, inflation is being pushed higher by increases in administered prices
, reflecting efforts to ease fiscal challenges.
Within few days of presenting the first budget in June 2013, the Government introduced deeprooted economic reforms, such as tax measures and adjustment in administered prices
, without which meaningful hope for economic revival was not possible" Dar told a big gathering of students and faculty members of John Hopkins University (USA) on the topic "Pakistan's Economic Recovery and Its Emerging Role in the Region".
She said, in a country of the size of India with 60 per cent of the population dependent on a relatively unremunerative agriculture sector, the country cannot give up administered prices
The main reason for this volatility is unexpected movements in food prices and changes in administered prices
," the central bank observed.
By contrast to the above disinflationary factors, the upward revision of some administered prices
in Serbia, notably electricity, will produce inflationary pressures.
According to the central bank, the inflation outlook will be determined by suppressed inflation being released through revisions in administered prices
as well as the recent depreciation of the rupee.
Although the government has made a firm commitment to fiscal consolidation, it is an election year and it may not be easy for the government to raise administered prices
closer to the election.
Abheek Barua, Chief Economist, HDFC Bank, said, "Notwithstanding moderation in core inflation risks remain from sectoral demand-supply mismatches and correction in administered prices
as well as their second round effects.
also ensure that international health-spending comparisons fail to accurately reflect the actual resource use, especially in countries where price controls produce shortages that result in costly waiting lists, bribes, and other informal payments that do not appear in official statistics.