The Federation of Pakistan Chambers of Commerce and Industry on Saturday warned the authorities that inflation above 6 percent can hurt economic growth in the country in post-corona slowdown and a careful strategy is required to keep it in control.
In a statement issued here, FPCCI President Mian Anjum Nisar said that Pakistan inflation reaches over 9 percent in Sept against stable annual inflation rate of 1.2 percent across the world amidst dropping food and energy rates, calling for putting the economy on a balanced and sustainable growth trajectory, addressing the underlying structural vulnerabilities, as low export growth, limited foreign exchange reserves, documentation of economy and higher food inflation are still major challenges to the economy.
He said that there is a consensus that a low inflation rate helps economic activities, while high inflation hurts economic growth. The high inflation environment affects decision making of all economic agents in economy, like investors, savers, consumers and producers through uncertainty about the expected payoffs from their decisions.
Moreover, a persistently high inflation also causes erosion of the value of the local currency in terms of foreign currencies.