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Wednesday, September 28, 2022
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Skyrocketing inflation

The inflation rate in the country jumped to 13% in the first month of 2022 – highest in 12 months and two per cent above the revised rate projected by the State Bank of Pakistan (SBP). The central bank had previously projected a nine per cent inflation rate for the current fiscal year. But the ruling PTI’s administrative decisions have only resulted in the Consumer Price Index (CPI) increasing for the fifth consecutive month. Prime Minister Imran Khan’s promise to reduce the burden on the lower income strata of the country by reducing prices of essential products, such as, ghee by Rs45 has also not been fulfilled until the time of writing. Instead, the premier and his finance minister have said that the inflation has only hit the salaried class and is ‘temporary’. Perhaps the ruling party ministers should pay a visit to areas outside the Red Zone to understand how the common man is running pillar to post to make ends meet under their governance.

It must be noted that this 13% inflation does not take into account the impact of the ‘mini-budget’, which has unleashed 17% taxes on almost over 140 products. The budget – Finance Supplementary (Amendment) Bill 2021 – was passed on the last day of 2021 and effects of it are yet to be embraced by the general public. In other words, the masses are in for a rude awakening in the coming months with the pace of food inflation already at 13.3% in cities and to 11.8% in villages and towns. Let us also not forget the weaking rupee against the dollar adding to the inflationary pressure in the economy. But wait. The government wants us to know that Pakistan is not on a different planet and so as inflation hits other countries so it does this country.

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And while we ponder upon whether that idea makes sense, it is (no)business as usual for the ruling PTI. This is not to say that an increase in global commodity prices have not resulted in a surge in the CPI but the government needs to introspect on its economic policies than point fingers at external factors. Successive governments. Global inflation.

Corruption makes for good optics in a debate but do not deliver results. Better and effective policies do. But only if our economic managers want to take that road less travelled.

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