The government cannot hide its inability to control rising inflation in the country by calling it a global phenomenon. Pakistan still has one of the highest inflation rates in the region and still the government has claimed that it has reduced prices and will provide subsidies on essential items.
The Asian Development Bank (ADB) has projected that inflation in Pakistan will remain high at around 7.5 percent in the current fiscal year, contrary to the government’s claim of having lowest prices in the region. The economy would grow by 4 percent which is the fifth-lowest rate in the region. It warrants to see if the economic team will still claim that the economy is being headed in the right direction.
Finance Minister Shaukat Tarin has claimed the increase in inflation is the result of the IMF programme. He claimed there was around a fifty percent difference in the price of cooking oil globally, while Pakistan kept the difference around 30%. The price of wheat recorded an increase of 13.5%. The government has also maintained that petrol price is the lowest in the region despite being sold at all-time high price.
There is no denying that higher global commodity rates have triggered inflation the world over while the situation has been exacerbated due to the pandemic. Global oil prices are the largest contributors of inflation in countries, such as Pakistan, that import crude oil or petroleum products. However, the government should acknowledge its inability to tackle food inflation. The government has been unable to control prices, hoarding, smuggling and tax evasion.
The inflation rate in Pakistan is the highest in South Asia and several times more than China. The finance minister is also expected to depart for Washington and resume talks on the IMF programme. The ABD has said the risk of high inflation is due to the unusual increase in oil prices or the currency depreciation which was witnessed recently. Rather than blaming international price increase for its own follies, the government should take action to reduce the price of essential commodities and provide relief to the masses.
