CONGRATULATIONS to Martians, aliens who lead them and economic managers who compile their year-over-year inflation index. The rate of inflation, at 2.6 per cent, is the lowest it has been in 30 years.

Now welcome to Pakistan. The price of electricity, that of natural gas and petrol have at gone up. In October ‘99, consuming around a thousand units of power meant a bill of Rs2,800. Taking in the same number of units now costs Rs4,480. That’s a 60 per cent jump.

In October ‘99, a gas bill for 500,000 units stood at Rs2,670. The same now costs Rs3,300. That is a jump of 23.6 per cent. In 1999, petrol averaged at a little over Rs26 a littre. It now costs over Rs34 a Iitre.

That’s a jump of 30 per cent (the international price of crude, over the same period, moved up from $22 to $23 a barrel; an increase of 4.5 per cent). Kerosene has gone up from Rs12.53 to Rs18.90 a litre, an increase of 50 per cent.

On another front, onions went up from Rs8.25 to Rs12.50 per kg a jump of over 50 per cent (not adjusted for seasonal variations). Gram from Rs23.61 to Rs34.40 per kg; an increase of 45 per cent. Bananas from Rs19 to Rs24 a dozen an inflation of 26 per cent.

Inflation, they insist, is under control. I just want to find out as to whose control is it under? The prices of other items of daily use like wheat flour, Mash and Masur haven’t really budged that much over the past couple of years, and that’s where our economic managers can sort of congratulate each other.

We were assured not too long ago that the domestic price of oil is being pegged to the international price. Here’s how the benchmark North Sea Brent has behaved in the international market.

In February 1999, crude bottomed out at $10 per barrel (but Pakistanis got a pittance for a break). In October ‘99, it traded at around $22 per barrel. By March 2000 (when the second price hike was effected in Pakistan), the international price had gone up by 10th to $24. Within the same period the price in Pakistan had gone up by an average of 15 per cent.

On 4 January 2091, the international price had come down to a little over $22 per barrel or back to where it stood in the October of 1999.

Between October 1999 and January 2001, the domestic price increase has been a wholesome 30 per cent.

On the external front, there indeed is a lot to cheer about. The ministry of finance has broken some major records. The current account surplus is a respectable $2 billion.

Workers’ remittances are up 126 per cent and reserves have gone up from $1,596 million as of 30 October 1999 to a current figure of over $6,000 million (sufficient to cover 5 months of imports).

The overall foreign debt is said to have come down from $37.9 billion in FY2001 to $36 billion in FY2002 (the pure debt component has actually gone up but foreign liabilities have come down).

The problem is that foreign exchange reserves dent make life easier for a common Pakistani (nor do they add to the government’s vote bank). What makes life easier is higher purchasing power bet the exact opposite of that is happening.

Is the economy fuming around? How does one measure the real strength of an economy? The only way to answer that is to first agree upon a set of representative indicators.

Then there is the question of reliability of such indicators. In the US, for instance, there is The Conference Board that has an independent methodology to routinely compile ‘business cycle indicators’.

In Pakistan, one has to sniff around for data that is, first of all, representative of economic strength and, secondly, reliable.

The four indicators that I use to monitor the real strength of our economy are private sector debt growth, consumption of petroleum products, consumption of natural gas and consumption of electricity.

Private sector debt is the accumulated figure borrowed by the private sector from all the banks put together. The logic being that the higher the growth in private sector debt the higher shall be the net investment. To be certain, businesses only borrow when they have confidence in the economy.

The most recent figures released by the SBP show private sector debt growth at Rs50 billion. The same figure for the last corresponding period was Rs80 billion. The inference here would be that the private sector had more confidence in the economy last year than they do this year. As a consequence.

Now on to economy-wide consumption of petroleum, natural gas and electricity. The logic, being that an economy on its way up is going to consume more and more energy (data available on all the three sources of energy is quite reliable.) Last year, we used us a total of 17.7 million tons of oil. The figure this year show a decline of nearly 1 million tons.

That’s a drop of around 4%. Last year, we consumed 714.744 million cubic feet of natural gas. This year’s figure is under 680.000 million cubic feet depicting a decline of close to 5%. Then there is electricity, 45,000 Gwh last year as oppose to around 44.000 Gwh this year.

That’s decline of a little over 2 per cent. If we are consuming less energy, almost from all energy sources, the logical deduction is that we are producing less. That’s the rough equivalent of a slowing economy.