DESPITE repeated claims by the leadership of the Government to have taken measures to tackle the inflation, latest report of the State Bank of Pakistan (SBP) says at least 11.5% the inflation during first quarter of financial year 2020 was double the rate observed in the same period last year and it was also the highest level of quarterly inflation in seven years. The report claims Pakistan’s economy moved progressively along the adjustment path but the growth is unlikely to meet the target of four per cent this fiscal due to soft trends in agriculture and manufacturing production.
The SBP data and analysis pertains to the first quarter but the situation has worsened further in the second quarter and there are apprehensions that more pressure is in store for the common man during third and fourth quarters. How the situation can change when rupee continues to shed its worth, oil prices are repeatedly being adjusted upwards, gas and electricity tariff is being increased in a wholesale manner, additional taxes are imposed and production is almost stagnant. Apart from the policies and programmes of the Government responsible for pushing the inflation upwards, now the issue also has external dimensions as in the wake of Iran-US tension, oil prices are going up and gold prices are jumping towards one hundred thousand rupee a tola. Under these circumstances, the Government needs to act urgently to provide relief to the masses. No doubt, the recently introduced Rs. 6 billion Utility Stores package was a step in the right direction as people would be able to buy some essential items at somewhat reduced rates from outlets of the Corporation. However, this is not sufficient or enough as not the entire population has access to USC, subsidy is available on selected items and the package itself is bound to expire within weeks or at the most in a few months. A review of the policies that are leading to price-hike is the answer besides measures to increase income of the people and job generation. The Government should focus on industrialization as it would help augment income, provide more employment opportunities, import substitution and create surplus for exports.
