ONE question being asked by almost every Pakistani today is: for how long will we have to suffer food price inflation and how far will it go? Based on the data signifying the linear upward movement in prices, especially of food and energy, over the last three years, these questions are valid. The government, on the other hand, seems quite oblivious to the extreme difficulty the vast majority of citizens face in making ends meet. That the purchasing power of most households continues to erode because of the sustained and steep increase in prices barely begins to describe the people’s financial hardship. A report in this newspaper yesterday has highlighted how the prices of various food staples have spiked under the present government. The prices of such items of daily use as vegetable ghee, cooking oil, sugar and some lentils have increased by an annualised average of 27pc, 23pc, 22pc and 21pc since October 2018. The increase in wheat flour price has been 15pc a year during this period. In absolute terms, cooking oil, sugar and chicken have become 88pc, 83pc and 60pc more expensive than they were three years ago. Likewise, the cost of beef, eggs, milk and rice has gone up 48pc, 47pc, 33pc and 29pc. However, no statistics can capture the true impact of inflation on ordinary people because sustained price hikes make daily life more expensive in a way that no index can measure.

There is little doubt that the post-Covid-19 global recovery has sent international commodity markets spiralling across continents on demand-supply imbalance. Still, double-digit food price inflation in Pakistan remains much higher than experienced in other regional countries like India and Bangladesh, even though both are net importers of basic food items — and energy — like us. In recent years, inflation in Pakistan has become a structural issue. The government cannot absolve itself of responsibility by dismissing the hike in domestic prices as a phenomenon of the international commodity cycle. Nor will its claims of passing on only part of the global price increase to people make the impact of its reckless consumption-based growth policies ahead of the 2023 elections as well as poor governance lessen its contribution to inflation. Food inflation had already escalated to 24pc in villages and 20pc in cities with the number of food-insecure households swelling across the country long before commodity prices started to rise.

The massive devaluation of the home currency on the back of expanding deficits on the current and trade accounts is not helping either. Pakistan Bureau of Statistics inflation data highlights a worrisome price trend over the next several months. The central bank too has already revised upwards its inflation forecast for the year. If anything, all indicators point towards more troubles for low-middle-income families already struggling to cope with erosion in the currency’s value, pay cuts and job losses.

Published in Dawn, October 27th, 2021

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