Economic, political and environmental instability in Pakistan has led inflation levels to hit a record high; an astounding 42.31 percent. The hardest hit segments of the population will be the poor and middle class who were already struggling to get by previously. The government can expect to get some heat from this but it is important to understand that tough decisions had to be taken to avoid complete economic collapse. Plus, a great chunk of this inflation is caused by several external factors that the government had no hand in. Regardless, the country must be reassured of the better times that are to come especially since the revival of the IMF deal is on the table.
According to the Pakistan Bureau of Statistics, the Sensitive Price Index for the week that ended on August 18 rose by 3.35 percent. This enabled inflation to experience a year-on-year increase of 42 percent. What this entails for the average citizen is that the prices of basic commodities like tomatoes, onions, pulses, eggs and chicken have increased. However, much of this food inflation is not a by-product of the government’s policies but a devastating effect of natural disasters like floods. The monsoon season has been unkind. Sindh alone suffered a loss of Rs.50 billion in the agricultural sector as most crops had been completely destroyed and fields swept away. This resulted in shortages in the market, causing food prices to increase exponentially.
Furthermore, a major reason why inflation is so high is because of the Russia-Ukraine debacle. Russian oil is absent from the market and alternative streams are rather expensive in the face of this sudden shortage. However, a nuclear deal with Iran is bound to provide some relief internationally; already, oil prices have dropped since June. The situation is likely to get much better through the revival of the IMF deal as well, for which Pakistan received a letter of intent. The government is continuing to implement policies, even at the risk of immense backlash, so that this deal can provide the financial assistance needed to recuperate and encourage economic growth once again. The people cannot live with such high rates of inflation, that much is understood, and while the government is working tirelessly, more must be done with greater urgency.