Sameeullah
THE queues outside utility stores are growing longer again in Pakistan. Public transport fares have climbed sharply, electricity bills continue to shock middle-class consumers and fuel costs ripple through nearly every aspect of daily life.
After a brief period of relative stability, the return of double-digit inflation has reignited anxieties across a country already exhausted by years of economic turbulence. Short-term inflation, measured by the Sensitive Price Index (SPI), increased by 14.75 per cent year on year for the week ending June 4, mainly due to higher retail prices of perishable food items, according to official data released on Friday.The spike has exposed the fragility of the country’s economic recovery and intensified concerns that millions of households may once again be dragged deeper into financial distress. For many Pakistanis, the latest inflation surge is not merely another economic statistic. It marks the return of a crisis that had already devastated savings, weakened household incomes and pushed large sections of the population closer to poverty.
Pakistan’s latest inflation spike has been closely linked to global energy disruptions caused by escalating tensions in the Middle East. Blockade-related instability around the Strait of Hormuz sharply increased international fuel prices, directly affecting Pakistan’s import-dependent energy sector. The country’s weekly oil import bill reportedly rose from about $300 million before the Iran-related conflict to nearly $800 million afterwards, highlighting its vulnerability to geopolitical shocks. With limited domestic energy capacity and foreign exchange constraints, higher oil prices quickly fuel domestic inflation. Rising transport costs and production expenses increase consumer prices, while residents in Karachi, Lahore and Islamabad report higher commuting and food costs.
Pakistan’s food inflation remains among the most politically and socially sensitive dimensions of the current crisis. Perishable food items have been particularly affected as rising fuel costs increase transportation expenses across agricultural supply chains. Market surveys and local reports from several Pakistani cities indicate sharp increases in the prices of onions, tomatoes, potatoes and poultry products. The burden on low-income households has become increasingly severe, raising concerns about malnutrition, debt dependence and economic insecurity. Meanwhile, rising electricity tariffs, gas charges and housing costs continue to strain household budgets, forcing many families to borrow informally, delay bill payments and reduce spending.
The State Bank of Pakistan responded to the renewed inflation surge by raising its benchmark policy rate by 100 basis points to 11.5 percent, reflecting concerns that inflationary pressures may continue into the next fiscal year. According to central bank assessments cited in Pakistani media, inflation is expected to remain above the medium-term target range of 5–7 percent for an extended period. Analysts suggest this indicates a broader inflation cycle driven by structural weaknesses, external dependence and fiscal pressure. Higher interest rates increase borrowing costs, slow investment and weaken consumer spending. Pakistan’s industrial sector faces added financial strain, while small businesses and manufacturers report reduced profitability. Labour groups and trade unions continue criticizing the widening gap between wages and living costs.
Pakistan’s inflation crisis is unfolding amid broader economic fragility. The country remains heavily dependent on external financing, IMF support programmes and short-term fiscal adjustments aimed at stabilizing foreign exchange reserves and debt obligations. Although authorities previously highlighted signs of improving macroeconomic stability, the return of double-digit inflation has revealed the vulnerability of those gains to external shocks. Analysts identify persistent structural weaknesses, including low export competitiveness, a narrow tax base, high energy costs and chronic balance-of-payments pressures. Currency stability also remains uncertain as renewed import pressures threaten the rupee. Any future depreciation could further intensify imported inflation. Meanwhile, economic hardship, unemployment, stagnant wages, declining living standards and ongoing political instability continue to weaken public confidence and investor sentiment.
Pakistan’s inflation surge has reignited debate over the social costs of IMF-backed economic reforms. Fiscal consolidation measures, including subsidy reductions, higher utility tariffs and increased taxation, have directly raised household expenses. Critics argue that although stabilization policies may strengthen fiscal indicators, the burden falls disproportionately on ordinary citizens rather than politically influential sectors. Rising electricity bills and fuel prices have become especially contentious, fuelling public anger over repeated tariff adjustments. The government maintains that these measures are necessary for economic stability and international financial support. However, economists and social observers warn that inflation and austerity may worsen inequality, social tension and affordability.
Pakistan’s return to double-digit inflation has exposed the fragility of an economy still struggling to recover from years of financial instability, currency depreciation and fiscal crisis. Heavy dependence on imported energy, weak industrial competitiveness and persistent governance challenges have combined to create an environment where global instability quickly translates into domestic hardship.
For ordinary Pakistanis, the impact is immediate and deeply personal. Rising prices affect daily meals, transport to work, school expenses and access to basic necessities. As inflation spreads across essential sectors, the gap between official claims of stabilisation and the realities facing households continues to widen. The return of double-digit inflation is not simply an economic event. In Pakistan’s current climate, it has become another visible sign of a nation struggling under the cumulative weight of financial fragility, policy inconsistency and rising public distress.
—The writer occasionally contributes to the national press.
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