Inflation goes up as people feel effects of fuel price hikes
Business
Record rupee depreciation has sustained inflationary pressure in Pakistan
ISLAMABAD (Web Desk) – Food and fuel prices continue fuelling inflation in Pakistan as the Sensitive Price Indicator (SPI) for the week ended September 21 witnessed a 0.93 per increase amid the complete government failure to check the rates.
Read more: Food prices owing to weaker rupee, supply shortages will push Pakistan inflation: ADB
The latest data released by the Pakistan Bureau of Statistics (PBS) shows that chicken price had jumped by 8.49pc followed by petrol 8.51pc, diesel 5.54pc garlic 5.19pc and onion 3.02pc.
At the same time, the year-on-year increase in SPI stood at 38.66pc when compared with the corresponding week of last year.
Read more: More food inflation as fuel price hikes increase production, transportation costs
The rising inflation in Pakistan urgently needs government intervention and a study of how different governments are dealing with the challenge. Tax on cut on food items is one of methods.
Read more: Fighting the food inflation: From net-zero VAT to supermarkets seeking price cuts
Earlier this week, the Asian Development Bank (ADB) had warned that average inflation in Pakistan will soar to 29.2 per cent caused by supply shortages, continued currency depreciation, import restrictions, and fiscal stimulus for post-pandemic recovery.
Meanwhile, the rising food prices shouldn’t be a surprise given that the regular fuel price hikes are increasing the production and transportation costs.
The main reason behind the persistent inflation in Pakistan is devaluation as the rupee had dropped to the record against the US dollar – a trend that is being reversed somewhat amid a crackdown on blacking marketers on hoarders.
However, the exchange rate is still too high, requiring further correction, as the people have also been hit hard for power and gas tariffs as the conditions set by the International Monetary Fund (IMF).
