If Pakistanis in the country were wondering when the inflation rate will subside, then they must brace themselves for another rise – diminishing their purchasing power parity even further. During a recently held meeting of the National Assembly Standing Committee on Finance, the State Bank of Pakistan (SBP) Deputy Governor Dr. Inayat Hussain said that the country may face a ‘fresh round’ of inflation at the backdrop of a falling rupee. It is pertinent to note that the CPI-based inflation rate was recorded at 9.2 per cent at the end of October. From the onset of this month, the petrol price was further hiked to a record level of Rs145.82 per litre, the power tariff was increased by Rs2.27 and prices of essential commodities, such as, wheat and flour were also jacked up. It is then safe to say that the inflation rate for the current month is likely to be in double-digits. On top of this, the SBP deputy governor wants us to be prepared for another round of inflation.
The fact is that the global increase in commodity prices have gravely impacted the prices at home. Add to this, the ingredient of increasing imports putting pressure on the rupee and we have a mixture of economic crisis. But the reality is also that the impact of this crisis could have been lessened, if not averted. During the meeting, Dr. Hussain himself had stated that the leadership could take some measures to contain the inflation. But the question is, are they willing to do so?
Since it came to power, the ruling party has only formulated growth-led policies by pumping in rupee into the economy, giving consumers a short-lived happiness. The adverse effect of this policy is now being witnessed with people struggling to put food on the table for their families. Even if the $6 billion IMF programme is revived, it will still take two to six months for the falling rupee to stabilize and curtail the rising inflation rate.
The SBP efforts to restrict purchase of the dollar in the open market and curb imports to ease the pressure on the weakening rupee have also failed. As a result, the government needs to take serious actions to reduce the economic hardship people are faced with today. For the average citizen the problem of rising inflation is more important than corruption, as their livelihood depends on it.
