Price bite

Pakistan is in the grip of pestering inflation. The trend seems to be free from regulatory interventions, and is eating away into the vitals of social mobility. The purchasing power of the common man has come to a naught, and even the middle class and the affluent are groped in a headache as to how to cope with it. The Prime Minister too has, of late, realised its bite and publicly admitted that all is not well in the domains of the economy as microeconomics is literally out of control.

The Sensitive Price Index (SPI) has jumped by 31% as compared to last year, and prices of staple diet have skyrocketed. The first day of the New Year witnessed a remarkable jump even in the prices at governmentsubsidised Utility Stores, as flour, edible oil and pulses showed an exorbitant inflated bill of around 35% as compared to the previous month.

So is the case with poultry which is now being sold at around Rs600 per kilogram, and the slump in supply of chicken-feed is being cited as the reason behind it. This is untenable and necessitates some drastic intervention and not merely rhetoric. The year-on-year rise in prices to the tune of more than 35% — to be on the compliant side — is an outcome of inflation ruling the roost at 45%. Coupled with this is the dilemma of banking circles that are short of dollars and unable to comply with the demand for opening letters of credit (LCs) and sell foreign exchange to the traders.

This has put the cart before the horse, and the wheel of economy is suspended outright. The PBS says the SPI indicators point out that prices of all commodities have increased in double digits since February 2021, and has much to do with three critical factors: supply chain disruption owing to the war in Ukraine; political instability; and the lack of government control to vengefully go against hoarders and black-marketers. And then there is the rise in prices of petroleum products by almost 60% during the last six months. The market is evenly poised for a crash