Islamabad [Pakistan], December 24 : The All Pakistan Business Forum (APBF) has observed that the inflation measured by the Sensitive Price Indicator (SPI) continued to witness a rise in the wake of higher prices of food and energy, Pakistan-based The Frontier Post reported.
The APBF's observation comes despite the recent decline in the prices of petroleum products, as essential commodities have not witnessed a decline, leaving trade and industry frustrated.
APBF President Syed Maaz Mahmood, citing the Pakistan Bureau of Statistics (PBS) said that the index increased by 38.28 per cent in comparison to the corresponding week of last year. Out of the 51 essential commodities covered by SPI, prices of 17 items increased while rates of another 17 witnessed a decline, The Frontier Post reported.
Meanwhile, prices of the remaining 17 items remained unchanged compared to the previous week. On a weekly basis, the price of tomatoes increased by 6.28 per cent, rate of egg 3.48 percent, powdered salt 2.75 per cent, garlic 1.04 per cent, tea (prepared) 0.73 percent and potato 0.35 per cent.
According to the Pakistan Bureau of Statistics, the electricity charges for Q1 increased by 8.59 per cent, energy savers 0.55 per cent, liquefied petroleum gas (LPG) 0.31 per cent and shirting 0.47 per cent. The year-on-year trend showcases price rise in the range of 58-137 per cent among different items, according to The Frontier Post report.
APBF President Syed Maaz Mahmood said that Pakistan has been facing inflation for the past couple of years due to the depreciation in the value of Pakistani Rupees (PKR) against the US dollar and the increase in global commodity prices like energy costs. Pakistan meets its energy demand through expensive imports.
The monthly inflation reading, measured by the Consumer Price Index, reached a four-month high at 31.4 per cent in September 2023. Earlier in May, the monthly inflation reading had reached a six-decade high at 38 per cent, The Frontier Post reported.
The latest 10.62 per cent appreciation of Pakistani Rupees (PKR) in the past 27 working days to a more than three-month high at PKR 287.62 per dollar is expected to encourage the Pakistani government to reduce the price of petroleum products in the upcoming fortnightly review for the second half of December, according to The Frontier Post report. However, the likely surge in the price of gas might keep inflation elevated and not allow it to reduce significantly soon.
Syed Maaz Mahmood emphasised the need to put the economy on a sustainable growth trajectory by providing incentives to the industry. He said that Pakistan's economy is facing various challenges, including low growth, declining exports, high inflation and declining foreign reserves, with fiscal accounts under immense pressure due to heavy interest payments.
Mahmood said that the fall shows that the Pakistani government will find it difficult to achieve export targets and industrial growth. He called on the Pakistan government to address the structural vulnerabilities through smooth energy supply at competitive prices, The Frontier Post reported.
Citing the data, APBF President said 1.7 billion dollars decline in remittances during the first half of the current year in comparison to the same period in 2022, exports reduced by USD 6.6 billion, foreign direct investment dropped by USD 654 million, public sector development Program reduced by PKR 122 billion, portfolio investment plummeted from negative 45.5 to negative 1032 million dollars and Public Sector Development Program dropped by PKR 122 billion, the report said.
He stressed that the decline in textile and clothing exports has gained momentum over the past five months due to various factors, including high energy costs, stuck-up refunds and a decline in global demands despite the depreciation of the Pakistani Rupees (PKR). He called exchange rate instability as one of the reasons behind the decline in exports.
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