The inflation in Pakistan continues to set records as the CPI has cumulatively swelled by more than 13pc in the last three months as energy subsidies are revoked, and taxes and levies imposed on fuels.
Financial analysts argue that an increase of this scale in the inflation index is usually seen in a period spanning 12 to 18 months. No wonder inflation in August spiked to the almost 50-year high of 27.3pc, the third fastest increase in the prices of consumer goods and services since April 1975, and the fifth since October 1973.
The new prices don’t even capture fully the impact on food or non-food inflation resulting from the floods that have ravaged the country, damaged the communication infrastructure, and swept away ready food and crops.
The numbers show that transport became pricier by 63pc, food by 31pc, housing and utilities by 27.6pc, clothing and footwear by 17.6pc, education by 10pc and health by 11.8pc last month amidst projections that, once slotted in, the impact of the deluge will drive up the cost of living even further over the next several months.
The impact of this year’s catastrophic floods on the people and the economy will become clearer over the next few weeks. The IMF has projected the average inflation for the present fiscal at 19.9pc and the State Bank in the region of 18pc and 20pc, which they might have to revise upwards to 22pc to 24pc once the economic impact of the devastation is fully factored into their fresh assessments.
With the IMF programme back on track, it is time for Finance Minister Miftah Ismail to focus on reducing inflation in the country, while it has been learnt that Pakistan Muslim League-Nawaz (PLMN) led coalition government is set to increase gas price by 53 percent, impose general sales tax (GST) on petroleum products and withdraw subsidies under the commitment given to the International Monetary Fund (IMF). This will definitely increase the burden on the already inflation-hit masses of the country and the government needs to take prompt action to ensure the sale of edible items as per official rates in the price lists, else the situation will keep deteriorating.
