FeaturedNationalVOLUME 16 ISSUE # 05

Inflation tsunami

Prime Minister Imran Khan often talked about a “tsunami” during his election campaign to bring about change in Pakistan. He has only been able to kick up a storm in the country as all edibles and essentials have gone out of the reach of the common man during his two years of rule.

It is ironic that the rate of a commodity increases or it becomes unavailable when Prime Minister Imran Khan takes notice of its price hike or shortage. People have started begging him not to take notice of shortages or increase in the price of anything. Many people took to social media and asked others to arrange for firewood when the Prime Minister took notice of a worsening gas crisis in the country. The same situation arose when he took notice of rising prices of sugar, wheat and flour.

Skyrocketing prices of foodstuffs and essentials have maligned the image of the government among the public beyond repair. The Pakistan Tehreek-i-Insaf (PTI) had promised to reduce prices after coming to power. Instead, prices of gas, electricity, foodstuffs and essentials have doubled, if not tripled in its first two years. The government has failed to stabilize prices, which fluctuate daily instead of months and years. It has eroded the credibility of the government in the public. Their belief in the government’s ability to perform has shattered badly and they are convinced that they will continue to face crisis after crisis in the government of Prime Minister Imran Khan.

Wheat and flour prices continue to rise and their shortages also persist in all provinces. Their rates have not stabilized despite importing 400,000 tons of wheat from Russia. Pakistan aims to import about 3 million metric tons of wheat. Sugar prices also remain volatile. It sells at over Rs110/kg. The federal government has also allowed pharmaceutical companies to increase prices of 94 lifesaving medicines by up to 262pc. According to the government, the decision was taken to end their shortages in the market due to “unrealistic prices.” In fact, September was the hardest month for the hapless people of Pakistan. According to the government’s own statistics, inflation jumped to over 9pc due to a double-digit spike in prices of food items as supplies reduced. Measured by the Consumer Price Index (CPI), the average rate of increase in prices of goods and services stood at 9.04pc in September over the same month a year ago, according to the Pakistan Bureau of Statistics (PBS).

Wheat and sugar prices saw an unprecedented hike. According to the statistics, wheat prices increased by 42.1pc in September from the same month a year ago in urban areas and over 45pc in rural areas. Prices of wheat flour rose 20.2pc in cities and nearly 27pc in rural areas. Sugar prices increased 25.4pc in September in both cities and villages over a year ago, according to the national data collecting agency. Food inflation in urban areas jumped from 11.3pc to 12.4pc in September on a year-on-year basis. In rural areas, it increased from 13.5pc to 15.8pc. The average increase in prices of perishable food items was calculated at 15.1pc last month over a year ago. Prices of the food and non-alcoholic group increased 14.7pc from a year ago. Non-perishable food group prices also rose about 14.7pc. Core inflation, measured by excluding food and energy goods, slightly decelerated to 5.5pc in September over 5.6pc in August in urban areas. In rural areas, the core inflation increased from 7.6pc to 7.8pc. The 9pc inflation in September was in line with the government’s expectations as it had projected it to remain in the range of 7.8-9pc. In August, it was 8.2pc. On a year-on-year basis, potato prices rose 67.2pc, tomatoes 51.9pc, spices 40.9pc, beans 40.3pc, pulse moong 39.3pc, eggs 38.6pc, pulse mash 34.5pc, butter 23.4pc, vegetables 14pc, woollen cloth 13.9pc, fresh milk 13pc, meat 12pc, electricity charges 11.8pc, cooking oil 11.1pc, dried fruits 11pc, construction wages 6.9pc, stationery 4.6pc, transport services 5pc and house rent 4.3pc. Eggs sell at over 160/dozen while the winter has not started yet. They will become costlier in the coming weeks. The average inflation rate in the first three months of the current fiscal year (July-September) stood at 8.9pc.

Rising prices and unemployment are the biggest issues of the people of Pakistan and recent reports indicate there will not be any immediate relief for them. In a report, the Asian Development Bank feared that between 1.5 million and 2.3 million young Pakistanis had lost jobs during the pandemic. The country’s unemployment rate that stood at 8.9pc in 2019 is likely to hover between 17.3 and 21.5pc in the current year.

On the other hand, the government claims to have improved all economic indicators. It cites a contraction of the current account deficit, projection of 1.5pc growth rate, resurgence of large scale manufacturing, stable exchange rate, positive signs of foreign direct investment and the foreign exchange reserves at a comfortable 20 billion dollars. These are remarkable achievements of the government, but they have not benefited the common people anyway. It must be a matter of great concern for the government that it has not increased the tariff of electricity and gas for some time, while the rupee is also stable against the dollar but prices of edibles and essentials continue to skyrocket. The common people are facing the toughest time of their lives. The opposition can exploit the sentiment in its movement against the government.