ISLAMABAD - The Pakistan Institute of Development Economics (PIDE) Friday in its inflation expectation survey revealed that inflation would remain high at 16.6 per cent during the current year owing to the policy credibility, political crises in some of the oil producing countries, implementation of taxes and prevailing law and order situation in the country. According to inflation expectations survey released today, public is expecting high inflation and high unemployment and remains skeptical about the growth rate in future. Respondents of the survey think that inflation in Pakistan is largely due to the food prices, bad governance and oil prices. According to survey results, tight monetary policy is hardly the panacea to meet the inflation target of 9.5 per cent. In the current PIDE Inflation Expectations Survey for March 2011, respondents are expecting 15.5 per cent inflation for April 2011 and 16.4 per cent for May 2011. Results also indicate that expected inflation will remain about 17.0 per cent for the next six months and 16.6 per cent for the current year. According to 28 per cent respondents, persistent high inflation and creditability of the policies are the major sources of inflationary expectations followed by political crises in oil exporting countries (24.7per cent), law and order situation (15.9 per cent) and implementation of taxes (15.1 per cent). Meanwhile, the respondents think that inflation in Pakistan is largely being driven by food prices, bad governance and oil prices. According to 32.2 per cent of respondents, food prices and bad governance are the main driving forces of current high inflation followed by oil prices (28.9 per cent). In addition to these, money supply, utility prices, fiscal deficit and wage are also considered as important determinants of inflation in Pakistan. Results of survey reveal that supply shock is the major source of inflation in Pakistan, so the only tight monetary policy is not the solution of the problem. Monetisation of fiscal deficit is also contributing factor in inflation. In response to the question regarding the effectiveness of the policy to curb inflation, vast majority of the respondents (81.7pc) suggest that both monetary and fiscal policy should be used to curb inflation. Experts believe that government should avoid the monetisation of fiscal deficit to control inflationary pressure. About 50 per cent respondents are in favour of easy monetary policy and 30 per cent prefer tight monetary policy for revival of the economy. Exchange rate is an important channel through which monetary policy affects output and prices. Higher interest rate makes domestic financial assets attractive and this induces the appreciation of the domestic currency. But due to the lack of competitiveness of the external sector of the economy, domestic currency is continuously in pressure and 61.5pc respondents are expecting that domestic currency will depreciate in next six months. About 20pc of the respondents expect that exchange rate will appreciate in the coming months, while remaining are of the view that there will be no change in it. Survey results indicate that experts are skeptical about growth rate. About 47 per cent are of the view that growth rate will remain the same in coming months whereas 39.1 per cent are expecting low growth in the coming months. Majority of the respondents considered that government policies are ineffective to boost growth and reduce the unemployment in the country. Vast majority (68.8 per cent) of the respondents are expecting high unemployment in the next six months.