ISLAMABAD - Pakistan Institute of Development Economics (PIDE) in its recent survey has forecasted that inflation will remain at 14.58 percent in the current fiscal year mainly due to the high prices of oil and food commodities. According to present PIDE survey, 89 percent of the respondents of the survey believe that inflation rate during the current year will be higher than targeted rate (9 percent). However, five percent are of the view that it will be lower while six percent say that it will remain unchanged. The majority of the respondents of the survey indicate that inflation for the current year will be at 14.58 percent. The survey results also indicate that oil and food prices are the major contributing factors for the current high inflation. According to 28.4 percent of respondents of the survey, oil prices are the main contributing factor of high inflation, followed by food prices (26.3 percent). In addition to oil and food prices, other factors contributing to inflation are utility prices, money supply and global financial crisis. In response to question related to the nature of current inflation, 28.4 percent of respondents believe that it is cost-push inflation, while 10.6 percent say it is demand-pull. However, 53.2 percent believe that demand-pull, cost-push and structural factors are the main sources of current price hike. Majority of the respondents of the survey (63.6 percent) suggest that coordination between monetary and fiscal policy is necessary to control inflation rather than solely rely on monetary or fiscal policy. However, 34 percent of the respondents consider that monetary policy is an effective tool to control inflation, and only 19 percent suggest that fiscal policy is the most important tool for price stability. As far as question regarding the consumer prices in the next year is concerned, 55.6 percent of respondents think that consumer prices will rise more rapidly, 23.9 percent are of the view that it will increase at the same rate, while 2.1 percent of the respondents think that consumer prices will remain the same for the year 2010-2011. In view of 89.4 percent of respondents, law and order situation affects inflation expectations, while 7.7 percent are of the view that law and order has no impact on inflation expectation. State Bank of Pakistan is pursuing high interest rate policy to control inflation. When question asked in the survey either high or low interest rate was the best for the economy; some 67 percent respondents replied low interest rate was better for the economy, whereas only 14.8 percent respondents said that high interest rate was better for the economy in the current inflationary situation. In response to a question regarding expectations about exchange rate for the next month and the next six months, a large number of respondents (49.3 percent) expect that domestic currency will depreciate in the coming month, while 30.3 percent of respondents think that value of domestic currency will remains the same. For the next six months, 28.4 percent of the respondents expect that the exchange rate will appreciate, whereas 60.4 percent predict that it will depreciate and the remaining is of the view that there will be no change. As far as unemployment is concerned, 58.7 percent of respondents think that unemployment will increase in the next six months. According to 63 percent of the respondents, unemployment will increase in next 12 months. Majority of the respondents (43.4 percent) are of the view that growth rate will increase as compared to the current growth rate, 26.2 percent says that it will decrease, while others say that it will remain the same. About 50 percent of the res pondents are of the view that current government policies are not sufficient to enhance growth, 10.4 percent says that these policies are useful, while remaining are not clear about the government policies.