The government has raised the price of CNG by Rs11.58, POL by Rs8.02 and diesel by Rs4.70 per litre. It will take days for the shock to be fully absorbed but it is going to tighten the inflationary screw at a time when the country is already crippled by the worst power outages in its history; and power-related riots are a daily occurrence. Everything is going to cost more — and very soon. The revised price of petrol for April will be Rs105.68 per litre while the price of high speed diesel (HSD), the most widely consumed petroleum fuel, has been raised to Rs108.16 and HOBC price to Rs135.81 — an increase of Rs8.94 per litre. This after the special committee formed by the prime minister had decided to keep diesel rates unchanged till June. Federal Minister for Water and Power Naveed Qamar had also said that the government had decided to provide eight billion as subsidy on diesel to maintain its price at the existing level, and in March the government even gave a Rs1.8 billion subsidy. But to everyone’s surprise, April 1 saw the government not only refusing to provide the subsidy but also increasing the price of HSD. As things stand now, the prices of all major fuel items have crossed the Rs100 mark. Nothing less than another deadly spate of inflation awaits us in the months ahead.
February inflation was lower than the 12.85 per cent for the same month last year. Similarly, the average inflation of 10.7 per cent in the first eight months of the current financial year is much lower than the 14.08 per cent for the same period last fiscal. Although core (non-energy, non-food) inflation also spiked by 0.3 per cent to 10.6 per cent last month, the escalation was much lower than the 1.5 per cent recorded for January. Still, the government should not allow this to shift its focus from the problems besetting the economy for several years.
Inflation
Except for the human life, everything has become expensive here.
— Josue de Castro
Dr Farrukh Saleem
According to a survey conducted by Gallup Pakistan more than 55 percent of Pakistanis consider inflation the major problem faced by Pakistan. Public Enemy Number Two is terrorism. According to the same survey, more than 21 percent of men and women in rural and urban areas of all four provinces of the country consider terrorism a major problem. And Public Enemy Number Three is unemployment. Gallup Pakistan found that more than 16 percent of Pakistanis consider unemployment a major problem.
What is the source – the only source – of Public Enemy Number One? Consider this: Prime Minister Yousuf Raza Gilani assumed office on March 25, 2008. On that fateful day, onions were being sold at Rs16.25 per kilo. Over the past 37 months the price of onions has shot up by 85 percent, sugar is up 130 percent and petrol is up 40 percent.
So, what is the source – the only source – of Public Enemy Number One? Now consider this: The day our current prime minister assumed office, the total money supply in Pakistan stood at around Rs5.5 trillion. In the following year the PPP government printed an additional Rs1,000,000,000,000. By June 2010, the money supply had shot up to Rs7.2 trillion. The PPP, during its second year in power, printed an additional Rs1,000,000,000,000. Over the seven-month period beginning in June 2010 (the latest figures available), the PPP has printed an additional Rs600 billion and by the time the current fiscal is over, the PPP would have printed an additional Rs1,000,000,000,000.
By Dr Akmal Hussain
If the budget is to have any relevance for the people of Pakistan, it must address the twin problems of deep recession and high inflation which, together, are causing acute distress to a large proportion of the population. A consequence of per capita GDP growth becoming negative has been a rapid rise in poverty and unemployment. At the same time, the 25 per cent food inflation rate is placing large chunks of the population into a very desperate situation. As much as 74 per cent of Pakistanis are food insecure. The challenge in the short run is that under tight budgetary constraints, fiscal space must be found to provide at least atta to the poor at an affordable price. The challenge in the medium term is to revive the economy and place it on a new growth path that is both equitable and sustainable. Let us see how the short term objective can be achieved in the next fiscal year….
“Food prices were not the cause of the crises in the Middle East and North Africa, but they are an aggravating factor. Our latest Food Price Watch shows that there is double-digit food price inflation in Egypt and Syria. It shows that commodity price spikes particularly hurt poor countries.” Global food prices have soared 36 per cent from a year ago, according to the Bank’s food price index released Thursday, pushing some 44 million people below the $1.25 a day poverty line. Another 10 million people would be pushed into poverty if prices rise another 10 per cent, according to Food Price Watch, a Bank price monitor.
