Pakistan's inflation highest in Asia: Bloomberg
Business
Govt had to increase energy prices for IMF programme
LAHORE (Dunya News) - Bloomberg in its report has revealed that inflation in Pakistan is the highest compared to the other countries in the region.
The American media company said the government had to increase the energy prices to secure new IMF programme.
The report said the inflation rate in the country has fallen, but the ratio of electricity bills is higher than the house rent, adding hike in power tariff, meeting IMF loans’ conditions and other reforms sparked countrywide protests.
Bloomberg report said: "The South Asian nation — where nearly half the population survives on less than $4 a day — has seen electricity prices surge 155% since 2021, after the government started hiking industrial and retail rates to bolster its chances of securing loans from the International Monetary Fund.
"The energy sector has become an acute pain point as Pakistan grapples with chronic economic crisis. Inflation of around 12% — the highest in Asia — has eroded purchasing power and pushed electricity consumption to the lowest in four years as people and companies abandon the predominantly gas-powered national grid in favor of installing solar panels.
"The average per-unit electricity price for residential users rose 18% in July, when the country secured a new $7 billion loan from the IMF. Many residents have since seen electricity bills — typically a fraction of household expenses — surpass rents that range from $100 to $700 a month, said Samiullah Tariq, head of research at Pakistan Kuwait Investment Co.
"Protests by citizens, business groups and opposition political parties have spread across the country, prompting Prime Minister Shehbaz Sharif to announce a Rs50 billion ($180 million) subsidy over the next three months to cushion the poorest electricity users from the blow of price hikes.
"Pakistan and the IMF have agreed to restore energy sector viability as part of the bailout program, which includes cost cuts and privatization of state-owned power distribution companies. Pakistan loses about 16% of the electricity it generates to theft, and transmission and distribution losses, according to its power regulator," concluded the report
