Afghan border closure to push inflation higher

The government on Monday predicted that the inflation barometer would rise to 6% in the current month due to floods and closure of Pak-Afghan border, the two temporary factors that the central bank also cited to keep its policy rate unchanged. Flood-related supply disruptions and temporary border closures have put upward pressure on prices of a few essential commodities and inflation is expected to remain in the range of 5-6% in October, according to the monthly economic outlook the finance ministry released on Monday. The report underlined that due to recent floods, there was a risk of inflationary pressure. Inflation, though temporarily affected by food-supply pressures, is expected to remain within target, it added. Cross-border trade between Pakistan and Afghanistan has been suspended due to skirmishes along the border and Pakistan's clear stance to go after terrorists hiding in Afghanistan.