Pakistan: 1 Kg Flour Costs Rs 800, a Roti for Rs 25; Inflation Continues….!

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Pakistan: 1 Kg Flour Costs Rs 800, a Roti for Rs 25; Inflation Continues Until 2025

KAKALI DAS

Pakistan, a country where the military holds significant influence, often overshadowing its democratic processes, is grappling with widespread dysfunction. Its citizens endure skyrocketing inflation, setting records for economic hardship.

Even basic staples like bread and flour have become prohibitively expensive in Pakistan.

Inflation in Pakistan has surged to over 20%, marking the highest rate in South Asia.

While there’s been some improvement from the situation a few months ago, with the inflation rate dropping by nearly 9% over the last three months, the country’s economic woes are far from over, prolonging the suffering for its people.

It’s anticipated that inflation won’t reach normal levels until September 2025, when it could potentially decline to 5%. Until then, the people of Pakistan are likely to face continued hardships. Despite this, Pakistan’s economy experienced a relatively decent month, albeit measured by Pakistani standards.

Recently, Pakistan received a significant loan from the International Monetary Fund (IMF) within just a couple of days.

The IMF approved an $11 billion loan, and the funds have already been disbursed to the Pakistan Central Bank. This development comes as a huge relief for Islamabad, which heavily depends on loans to service its existing debts – owed to various entities from China to Gulf states like the UAE and Saudi Arabia, as well as the IMF itself.

Therefore, the new loan represents the latest positive development for the country, marking a noteworthy conclusion to a month that has been better than usual.

This month started with a positive note on the inflation front: Pakistan’s March inflation rate was 20.7%. While this figure might alarm many, in the context of Pakistan, it marks a notable drop to just over 20%.

Indeed, inflation has been on a downward trend for several months. It declined for three consecutive months: from 29.7% in December to 28.3% in January. February experienced the most significant drop, falling to 23.1%, and March concluded with a further decrease to 20.7%.

Pakistan’s inflation rate dropping by 9% in just three months brings much-needed relief for the country. However, it’s important to note that not everyone has benefited. Prices remain significantly higher compared to just a few years ago, disproportionately impacting those at the bottom of the income ladder.

Consider the case of the humble roti, a staple in South Asia and a type of flatbread enjoyed by all. In Pakistan, however, the humble roti comes with a hefty price tag. Now priced at 25 Pakistani rupees each, that’s a substantial ₹7 per roti in Indian terms.And this isn’t the cost at a restaurant or a trendy café; it’s the market price across Pakistan, affecting everyone.

The people of Pakistan are grappling with these exorbitant prices, as essential goods gradually become unaffordable. Concerns are raised about the soaring cost of raw materials such as flour, which now stands at Rs 800.Additionally, utility expenses for electricity, water, and gas have all risen, partly attributed to influences from institutions like the IMF.

The IMF provides loans but requires something in return: the removal of subsidies. To secure loans from the IMF, Pakistan had to eliminate its fuel and utility subsidies. Consequently, ordinary citizens have borne the brunt of their government’s financial mismanagement, directly shouldering the burden.

The situation has reached a point where a 20% inflation rate is deemed acceptable in Pakistan.According to the Pakistan central bank’s predictions, it will take another year and a half for conditions to improve. By September 2025, the inflation rate is expected to drop to 5 to 7%. This indicates that the people of Pakistan still have challenging months ahead of them.

02-05-2024

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