Pakistan's economic chaos: Double-digit inflation of 24.9 pc a 14-year high
Aug 01, 2022
Islamabad [Pakistan], August 1 : Pakistan Bureau of Statistics (PBS) on Monday reported that the inflation rate in the country has spiked to a 14-year high of 24.9 per cent in the month of July, media reported.
This has led to an exponential growth in the prices of perishable food and transport groups. Inflation was recorded at 4.3 per cent in the first month of the fiscal year 2022-23, in comparison to an increase of 6.3 per cent in the previous month and 1.3 per cent in July 2021.
The Consumer Price Index (CPI) inflation rate spiked at 23.6 per cent in urban areas and 26.9 per cent in villages and towns on a yearly basis. Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services.
Pakistan's inflation has remained in double-digit which is adversely affected people's purchasing power. The overall price growth remained in double digits because of an increase in the rates of food items, which were taxed by the last government, reported the country's local media outlet Geo TV.
Overall, out of 12 groups of various goods and services, the inflation rate for 10 of them remained in double digits. This indicates that the inflation web has spread across almost all commodities.
The prices of both non-perishable and perishable food products increased significantly last month. The food group prices surged nearly 29 per cent in July in comparison with the same month a year ago. The PBS said the prices of perishable food items increased by 32.93 per cent.
There is an increase in the prices of food items and petroleum products. The pace of food inflation surged to 27.4 per cent in cities and rose to 29.6 per cent in villages and towns last month, according to the PBS.
While speaking with Geo TV, former advisor Ministry of Finance Dr Khaqan Najeeb said, "In the short run, it is important to do vigilant supply-side monitoring of key food items to manage food inflation. The government must also ensure supply of cheaper fuels, ensure that there is no undervaluation of the rupee, and limit the rate of monetary expansion," he suggested.
The economist said that serious work is to upgrade the productive capacity of Pakistan's industry and agriculture sector if the country has to get a grip on inflation in the medium term.
"The government's intervention must be limited to improve the functioning of markets. We must realise that state-owned enterprises are a drag on the economy and partly cause the high tariff due to their inefficiencies resulting in high inflation," he said.
