Consumer expectation surveys will facilitate process to design forward-looking monetary policy

Karachi: Governor State Bank of Pakistan, Yaseen Anwar says consumer expectation surveys will facilitate process of designing a forward-looking monetary policy, help study inflation expectations, economic confidence of households, their reaction to economic and policy decisions.”

Inaugurating Centre for Survey Research Wednesday at SBP, he said expectation surveys are based on households’ perceptions on current and future economic conditions. Expectations about inflation, interest rates, stock prices, employment are important for policy formulation. This explains why many developed and developing countries are using household surveys for policy research purposes.

Anwar said until recent times, a documentation of expectations channel at household level and one that is nationally representative of Pakistan was not available with either SBP or private sector. It was this very fact which made it all the more important for SBP, being central bank to enhance efforts to collect information on expectations. “It will allow us to undertake meaningful research, well supported by firsthand knowledge of situation in the country.”

“I am glad we have support of reputable Institute of Business Administration IBA. It is of particular importance in that it is first such exercise undertaken on full scale level. A pilot project was completed last July, which enabled SBP to stop, rethink, ultimately adopt most appropriate strategy to steer it into practice,” he added.

SBP Governor said this joint effort between SBP’s Research Department & Professors in Accounting, Law, Computer Sciences, Economics, Statistics of IBA will go long way in providing reliable set of information on consumers’ expectations. “I hope it will be of great help to future policy makers, primarily by bimonthly documenting consumer expectations.”

IBA Director Dr. Ishrat Hussain recognized SBP’s efforts in formulating consumer expectation survey and undertaking research of national level. He said SBP & IBA will keep working together in future to build such economic intelligence tools to develop better understanding of economy.

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