KARACHI - The growth in Broad Money (M2) for the fiscal year 2009-10 has been estimated at 15 per cent, which seems substantially higher when compared to a pace of 9.56 per cent in the same period last year. This calculation is based on the total stocks of monetary assets held by the banking system during the entire course of FY10 rather than premised on the currency flows supplied by SBP and scheduled banks in the period under review. If the money supply growth gets higher then it is a clear sign that the CPI inflation numbers (price indices) would also be greater from the projection of 11.5-12.5 made by SBP for FY10. It also indicates that the central bank prints more money to finance Governments revenue deficit and to meet its fiscal spending. The data on monetary aggregates for FY10, including the components and the factors affecting M2 growth, is yet to be issued by the State Bank of Pakistan. Conversely the statistics released last week showed the broad money growth as on June 25, 2010, increased to 10.75 per cent as against 7.53 per cent a year earlier. The large impetus to M2 growth during July-25th June Fy10 came from Governments high financing requirement for budgetary borrowing and rise in net foreign assets (NFA) of the banking system. Although the outstanding stock of NFA held by SBP and scheduled banks because of the inflows of official grants improved slightly but the external account is still facing some pressure due to lower than expected financial inflows and retirement of such loans in the period of analysis. The growth in NDA was due to increase in government borrowing and lower than expected retirement under commodity finance. Sayem Ali, Economist at Standard Charted Bank sees 15 per cent growth in broad money creation during FY10, a 50bps up from an expansion of 13.5-14.5 per cent predicted by SBP in its report issued last month. While talking to The Nation, he said Pakistans money supply growth within the economy is faster than all of its key trading partners, except for China. The broad money growth of Pakistan was at 18.8 per cent YoY as of April 2010. By comparison, M2 growth of the US was registered at 1.6 per cent YoY, Chinas was 21.5 per cent, Saudi Arabias was 4.8 per cent, and the rate of money supply of UAEs was recorded at 8.7 per cent YoY during the corresponding period this year, he said. In economics, the money supply or money stock is the total amount of money available in an economy at a particular point in time.