Double-digit inflation

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SITUATION is turning quite alarming both for the poor and
middle class as the inflation has entered double digit in the first month of the new fiscal year, the biggest increase in five years and nine months. According to Pakistan Bureau of Statistics, inflation rose to 10.34 per cent in July this year from 8.9 percent the preceding month.
There is no doubt that the present government assumed a very poor economic situation and as a result it took difficult, some very hard and unpopular decisions which has pushed up the inflation level. Nonetheless, increase in prices of electricity, gas and petroleum products as well as rupee depreciation has bitten the common man very hard and affected their purchasing power. Government has launched a comprehensive social protection Ehsaas Program to protect the weak segments of society but in our view it is not enough in the current circumstances. Far bigger thinking is required to protect the poor and middle class from the ravages of the inflation. As the prices of petroleum products are on the decline in the international market and are standing at very reasonable rates, we will suggest the government cut the petroleum prices as it will really help bring down the prices of essential commodities due to decrease in transportation cost. Already the transporters have raised their fare following the recent raise in petroleum prices which is all set to further push up the price hike. Then, State Bank of Pakistan must now consider revising downward the policy rate as the current level has brought the business activities to a standstill. Until and unless we do not promote economic activity, we cannot create economic opportunities for our population to withstand such inflationary pressures. Salaried class is suffering the most as their home take salary has reduced due to change in tax slabs in the federal budget. We will suggest the government announces a special allowance for them keeping in view the current inflation level. It is time for government to take such policy measures that reverse this inflationary trend otherwise it will have to bear a political cost.

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