WITH their costs going up following the massive currency devaluation and increase in fuel prices in the last couple of weeks, it was only a matter of time before the producers of packaged milk and baby formula raised their rates to protect their profits. As a report in this paper suggests, an international food company with the largest market share has blamed the inflationary environment for the latest hike in milk prices. The sellers of loose milk and its derivatives have already raised prices to recover the increase in the cost of animal feed and transportation. At a time when everything ranging from lentils to vegetables to medicines to clothing to stationery to cars is getting more expensive by the day, it is naive to expect the producers of packaged foods to keep their prices unchanged. Considering the consistently falling rupee and the anticipated hike in petroleum, electricity and gas prices in the days ahead, to meet IMF conditions, inflationary pressure will intensify further going forward. The 2.6pc increase in the weekly SPI inflation is just an indication of the shape of things to come. The price increase trajectory, however, will depend on the size of these adjustments, as well as on whether the latter are implemented all at once or staggered over a period. The potential implementation of the sales tax on fuel, as being demanded by the IMF, could quicken the pace of monthly inflation that already has surged to a 48-year high of 27.6pc.
The rising inflation hasn’t spared anyone, but the impact of the surging cost of living since last June on low-middle-income families has been unbearable. Inflation indices don’t capture fully the misery of ordinary Pakistanis who have seen high prices wear down their savings and force them to cut expenditure on food, healthcare and education to make ends meet as their purchasing power erodes. The government and its finance ministers, past and current, have consistently blamed the previous PTI government for sowing the seeds for the dire economic situation and surging cost of living today. They are not wrong. But it doesn’t absolve the current set-up of its own responsibility for contributing to the rot by taking decisions that have worsened the crisis in the last 10 months. The inflation-stricken people deserve better than just lip service and a blame game played by politicians.
Published in Dawn, February 9th, 2023