Inflation continues to soar. The recent, weekly Sensitive Price Index (SPI) readings confirm that the prices are surging across the board and by a lot, and that the double-digit headline inflation — Consumer Price Index (CPI) — will be back when the Pakistan Bureau of Statistics (PBS) publishes the numbers for this month.
SPI inflation recorded a 37-week high increase of 1.8 per cent week-over-week and 17.4pc year-over-year. Major contributions came from petroleum prices, electricity charges, vegetables and milk. The trend indicates that CPI inflation is likely to enter double digits in November and persevere for the next several months.
A comparison between the CPI numbers from August 2018 when the PTI came into power and October 2021 demonstrates that the cost of living has gone up by 35pc in the last 38 months. Food prices are 48pc more expensive today than there were in August 2018, with health and transport costing you 32pc more. Likewise, wheat flour and sugar are 59pc and 79pc dearer. The prices of fresh vegetables have almost doubled in this period and people are paying 118pc more for chicken meat and 89pc higher for cooking oil. The rates of different pulses, which a government spokesman wrongly claims are lower here than in India, have shot up by up to 83pc. Eggs are 71pc more expensive and fresh milk costs you 33pc more than three years back.
Statements by government mouthpieces that Pakistan is still cheaper than India and Bangladesh or inflation under PTI is lesser than under other parties is only making matters worse
The spike in the rural prices is a bit more pronounced though, according to the PBS data. Strip out volatile food and energy prices, the core CPI inflation doesn’t look much better either. The non-food, non-energy prices have risen and fallen between 6.25pc and 8.68pc during this period.
With prices higher and wider than ever, inflation has overshadowed everything else. The outlook is even bleaker. Those who thought prices would come down or stabilise have been proven wrong. People are experiencing unprecedented pain, not even felt in the early years of the last government of PPP when food inflation had soared to 25pc on the massive upturn in the international commodity markets and steep depreciation of the home currency. Unlike then, consumers are now helplessly seeing their disposable incomes vanish and their earnings squeeze.
The government cannot shoo away inflation, or hush the public clamouring as a growing number of people are feeling the excruciating pain of higher costs of food, fuel, power, gas, on and on while their income erodes and wages stagnate. If anything, the hammering by government mouthpieces that Pakistan is still cheaper than India and Bangladesh or inflation under PTI is lesser than under other parties at other points in the nation’s history or the current price spiral is a hangover from the pandemic and previous government’s policies or external commodity shocks are pushing domestic inflation is making the matters only worse.
It is not hard to explain growing public fury against the government whose functionaries are trying to pour oil on fire instead of alleviating their anger. Unlike the Bank of England governor, who said he was very sorry that UK inflation was rising amid forecasts the cost of living could reach as much as 5pc, his Pakistani counterpart Reza Baqir was unsympathetically defending the impacts of the steep rupee devaluation on the domestic prices just a few weeks back. He isn’t alone in this.
The justifications being advanced by Prime Minister Imran Khan and his cabinet ministers are as lame as these can get. They are not ready to accept their contribution to increasing costs of living: poor governance, blind pursuit of growth through expansive fiscal policies ahead of next elections, failure to address structural issues facing the economy and domestic supply chain and so on.
While defending their failures, they fail to see that inflation is real for people struggling to cope with a sustained onslaught of elevated food and energy prices. The majority of people are least concerned about the reasons, right or wrong, put forward by the rulers for the sustained price spikes. What bothers them is the erosion of their ability to put food on the table or consult a doctor when needed; what bothers them is the pain they feel at fuel pumps or when they pay their electricity and gas bills or house rent.
The inflation data computed by the PBS does not capture even a fraction of the pain the low-middle-income households are experiencing. The prime minister has repeatedly said in recent weeks that his government is fully aware of the impact of inflation on people. Is he? If he were, his administration wouldn’t be trying to obfuscate reality through price comparisons with other countries where the threshold for suffering inflationary pain is much higher than in Pakistan. So, the next time when the government functionaries open their mouths to speak on prices, they better first say sorry to common Pakistanis reeling under the unbearable mass of inflation tax.
Published in Dawn, The Business and Finance Weekly, November 15th, 2021