CPI down but…

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PRIME Minister Imran Khan shared more ‘good news’ with people of Pakistan through his Twitter account by stating that the consumer price index and core inflation are both now lower than when the PTI government was formed in 2018. Taking solace from the achievement, he instructed his economic team to stay vigilant and ensure that inflation stayed under control.

The Government might have its own reasons to feel satisfied and is entitled to make claims about a downward trend of inflation based on some formula and data but the ground situation is contrary to what is being claimed. Prior to PM’s tweet, Minister for Planning and Development Asad Umar also stated that during current month inflation on Consumer Price Index is down to 5.7pc, while the Core Inflation is at 5.4pc, adding that prior to PTI government formation, in July 2018, the Consumer Price Index was 5.8pc while core was 7.6pc, indicating that the rate of inflation is lower today than prior to the assumption of office by the present government. One doesn’t know on what basis the economic team of the Government believed that the inflation was coming down when prices of almost all items and services are going up. Food inflation has assumed alarming proportions and there are no indications as yet that it is lowering because price of sugar is once again hovering around Rs 100 a kilogram and prices of wheat flour are at the previous unjustified peak. As Government leaders were expressing satisfaction over price situation, milkmen hiked the price of milk by Rs. 10 a kilogram and prices of chicken went beyond Rs. 210 per kilogram (for live birds). It is all the more pinching that the price hike is mainly triggered by the actions of the Government as is reflected by significant increase in the prices of petroleum products for the third consecutive time. How prices can come down and relief can be provided to the masses when prices of petroleum products are jacked up every fortnight and tariff of electricity and gas is increased to meet IMF demands. The impact of the latest increase in prices of POL products would be reflected in the market during the next few days and weeks. In fact, the Government has miserably failed to check price-hike and left the masses at the mercy of circumstances. Increase in the cost of production would not only mean more inflationary pressure on people but also challenges for the export sector. What a contradiction that on the one hand we are devaluing our currency to make our exports competitive but on the other hand raise prices of input every now and then to render them uncompetitive!