The storm of inflation we have been talking about since a long has started to hit the masses in Pakistan. People are now finding it difficult to win bread and butter for their families now. This year, particularly, has seen decades-high inflation due to an increase in international commodity prices as well as the rupee’s depreciation. In addition, this year’s monsoon floods have caused widespread destruction to standing crops which led to a shortage of vegetables. Subsequently, the government had to remove duties on the import of onions and tomatoes from Afghanistan and Iran.
The removal of subsidies on electricity earlier this year following an agreement with the International Monetary Fund (IMF) has also contributed to inflationary pressure. Food exports and imports have long suffered from delayed decision-making and knee-jerk reactions to global or domestic events.
Consumer prices have risen sharply over the past several months, with annual inflation staying above 20 per cent since June last year.
Islamabad is trying hard to clinch the loan deal with the IMF but the fund is not in the mood to address Pakistan now as it is asserting to fulfill the commitments of the financing from the friendly countries first. The incumbent government recently increased the price of petrol despite the downward trend at the international market to appease the international lender.
Sources said Pakistan has become active to get financial help from the friendly countries including China, Saudi Arabia and the UAE. Islamabad is eying to get $2 billion each from Saudi Arabia and China and expecting $1 billion from the UAE. The only way to address the inflation is now to boost foreign reserves to stabilize the weakening rupee against the greenback, but the rulers have to rethink how long will the economy be rescued on loan. The country needs complete overhauling to stablise its economy.
