GOVERNOR State Bank of Pakistan Jameel Ahmad, dur ing a meeting with key international investors and fund managers in Washington DC, stated that the inflation is expected to start decelerating over the next few months. Though the Governor did not elaborate further as to how it will be achieved, but the remarks will be music to the ears for the millions of consumers bitten hard by record inflationary pressure over the last many months. What to say of the poor lot, the middle class has also direly felt the impact of inflation which significantly reduced their purchasing power.
We believe that the very remarks of the Governor SBP are based on the current trends in the international market. According to the Food and Agriculture Organization of the United Nations, the benchmark index of international food commodity prices declined for the 12th consecutive month in March. The very prices of palm and soy oils have dropped amidst subdued global import demand while those of sunflower seeds and rapeseed oils also fell due to ample export availability. Similarly, the prices of cereals are also witnessing a continuous decline while the crude oil prices are also not that high as they used to be about a year ago when they had crossed over one hundred dollars per barrel. Whilst the prices of commodities have dropped at the global level, it is unfortunate the trend is quite the contrary in our domestic markets as prices of everything ranging from edible oil to those of wheat flour and rice have only significantly increased much to the pain of the consumers.
This indeed poses additional challenges to food security. Apparently, the situation has aggravated because of the massive depreciation of the rupee. Since the inflows are expected from the IMF and other lenders as well as some friendly countries such as China, Saudi Arabia and the United Arab Emirates, we expect it will stabilize our currency and then the impact will be seen in the prices of commodities. But how far it will be relieving is yet to be seen as in the presence of high utility bills and other factors, bringing the prices down will be a major challenge. It is also for the government to take the requisite steps that increase the purchasing power of our people so that they could better cope with the situation.
