ISLAMABAD: A combination of inflationary measures means that inflation during the past week surged by 42.60 per cent – dashing the very hopes triggered by a decline experienced in the first three months of 2023-24, as the rising costs of living and stagnant wages have made the lives of an overwhelming majority miserable.
One can see the overcrowded eateries serving the elite and upper middle class in big cities. However, things are completely opposite for others who have been crushed by the sustained food inflation, inflated power and gas tariffs as well as out-of-control transportation costs.
The week ending December 21 was the sixth in a row where inflation has been recorded over 41pc as reflected by the Sensitive Price Index (SPI) which is calculated on the basis of 51 essential items.
Gas price hikes along with an upward movement in food prices – especially in the case of flour, rice, pulses, spices and vegetables – mean that people can’t escape the cost-of-living crisis amid a shrinking purchasing power.
Earlier, Pakistan saw its monthly inflation in November going up against all the predictions made by the country’s central bank as well as the top international financial institutions, with the Consumer Price Index (CPI) registering a 29.2pc increase when compared with the same month on 2022.
According to the Pakistan Bureau of Statistics (PBS), gas prices are up by a whopping 1,108.59pc on the annual basis followed by cigarettes 93.22pc, chilies powder 81.74pc, wheat flour 78.80pc, garlic 72.48pc, rice basmati broken 62.52pc, rice irri-6/9 59.45pc, tomatoes (56.89 per cent) and sugar 50.33pc.
However, the SPI for the week under discussion saw a meagre 0.51pc decrease.
The alarming trend means the rate cuts are now a distant possibility given the State Bank of Pakistan (SBP) is following monetary tightening – a policy advocated by institutions like the International Monetary Fund (IMF) as well as US Federal Reserve, European Central Bank and other top central banks.
The higher interest rates have paralysed the economy where the higher borrowing costs is skyrocketing the cost of doing business, which is already much higher in Pakistan than desired level around the globe.
In this environment, there is doubt that the confidence level among the businessmen and industrialists will be down, as they were hoping for interest rate cuts.
One must remember that no expansion in existing businesses and establishment of new ones mean there are neither job creation opportunities nor wage hikes, further worsening the prevailing cost-of-living crisis.
