19 August, 2022
Pakistan Bureau of Statistics (PBS) on Friday stated that the inflation measured by the Sensitive Price Index (SPI) rose sharply in the previous week climbing to a record 42.3 per cent year-on-year basis in August.
Before this, the highest ever year-on-year increase in the SPI was 38.63 per cent, recorded for the week ending on August 5, the Dawn reported.
The latest data shows that the SPI rose by 3.35 per cent over last week, mainly because of higher food prices. The highest week-on-week increase in inflation was recorded at 3.68 per cent for the week that ended on July 28.
The report said that the increase was observed in the prices of food items including tomatoes 20.28 percent, chicken 7.57 percent, onions 2.30 percent, powdered milk 2.03 percent, eggs 1.63 percent, pulse moong 1.42 percent and potatoes 1.07 percent.
The non-food items that witnessed increase in prices included electricity 6.83 percent, petrol 2.96 percent and cigarette 1.69 percent.
Pakistan is grappling with a worse economic crisis and the deepening political turmoil is spawning doubts about the government’s ability to make tough decisions going forward and tackle the longstanding structural issues of the economy responsible for the recurring balance-of-payments crisis.
Amid this, the Pakistani citizens are taking their financial woes online and criticizing the country’s Prime Minister Shehbaz Sharif and Pakistan Muslim League Nawaz (PML-N) top leader Maryam Nawaz for doing nothing for the relief of the masses.
Recently, a video of a Pakistani woman surfaced, describing the skyrocketing prices of medicines, groceries and electricity in the country, especially in Karachi city and slamming Prime Minister Shehbaz Sharif and PML-N leader Maryam Nawaz.
The video was shared by Pakistani journalist Hamid Mir in which a woman identified as Rabia from Karachi could be seen slamming the government after skyrocketing inflation. The woman asks the government whether she should end her children’s lives by not feeding them anymore, The News International reported.
The woman could be seen crying and complaining about the financial problems she was facing after the rise in inflation. She said that the rulers should tell her about how to manage her expenses after rising the prices of essential commodities.
With the depleting foreign currency reserves and rising inflation, Pakistan is on the brink of economic collapse and heading towards a path similar to the economic downfall of Sri Lanka.
Pakistan’s current economic indices are quite poor. According to the UNDP, Pakistan is facing a debt in excess of USD 250 billion and Karachi being the city’s economic capital has been also undergoing severe instability.
The cost of living crisis is tipping millions of people into poverty and even starvation at breathtaking speed and with that, the threat of increased social unrest grows by the day.
According to the Global Liveability Index released by the Economist Intelligence Unit (EIU) recently, Karachi has yet again made it to the list of worst cities to live in the world in 2022.
The report analysed and marked 172 cities on the basis of five factors which are infrastructure, health care, education, culture, and entertainment, the News International reported.
Since the start of 2022, the Pakistani rupee has lost over 30 per cent of its value, according to the Foreign Exchange Association of Pakistan.
The fast depletion of the foreign exchange reserves has been the reason behind Pakistan’s inflation of twin deficits, a lack of foreign currency inflows, and a sharp increase in foreign debt servicing obligations.
Pakistan PM Shehbaz Sharif’s coalition government, which took over in April 2022, is grappling with multiple political and economic crises. Its current account deficit has surged to USD 17.4 billion or 4.6 per cent the size of the economy during the last fiscal year on the rising trade deficit.
A surging current account deficit amid depleting dollar inflows from multilateral and bilateral lenders, as well as shrinking foreign investment have brought the foreign exchange reserves and rupee under enormous pressure over the last several months.
It has stoked rapid inflation, forced the State Bank to boost borrowing costs to a multiyear high and eroded investor confidence in the economy.
Moreover, apart from poor living conditions, theft, smuggling, drug peddling, and violence have further deteriorated social and economic conditions.