The next and most likely attack is inflation, which coincides with the introduction of a mini-budget and an increase in fuel prices. The minibudget’s effects haven’t yet shaken the country, but data from the previous week reveals that due to rising food and gasoline costs, short-term inflation as assessed by the Sensitive Price Index (SPI) increased to 38.42% year-over-year for the week ending on February 16.
The Pakistan Bureau of Statistics reports that the worst short-term inflation rate ever was 34.83 percent per year. The SPI rose 2.89 percent week over week as opposed to 0.17 percent the week before. Since October 27, this is the largest weekly increase. Inflation has been very high during the past few years. For the past year or so, it has been very awful. Most people’s earnings, whether they are paid employees or independent contractors, have not kept up with inflation, and liquid savings have lost value. The decline in wage levels is not surprising.
The severe floods that ravaged large areas of agricultural land last year and caused a shortage of some foodstuffs have contributed to inflation. Additionally, when the nation’s foreign exchange reserves declined to a dangerously low level, importers encountered difficulties persuading banks to establish letters of credit. Due to this, the cost of necessities like wheat and beans has recently increased.
When will the time of excessive inflation come to an end? Nobody knows, but people need to understand that the time of high inflation is still ongoing. The worst is still to come and might last for several years. The hard times will only grow worse for people who don’t have numerous revenue sources and savings held in assets that outperform inflation (in dollars or gold). The standard of life will need to significantly decline. And for many years to come, this will still be true for the vast majority of individuals in the nation.
The majority of persons up to upper-middle income levels will require a significant recalibration of their spending. Basics must be prioritized, and many, if not all, non-essentials must be eliminated. Some people may be able to work more hours in the evenings or on weekends, but this is unlikely for the majority of people.
