By Savithri Rodrigo
Karachi Pakistan (Commonwealth Union)_Echoing paradigms all too common in South Asia with Sri Lanka also battling high inflation and heavy increases in utility tariffs and taxation to appease the diktats of the International Monetary Fund, Pakistan has also pushed its gas tariffs higher sending inflation skyrocketing to 41.5 percent Year on Year.
Pakistan’s Bureau of Statistics stated that the Sensitive Price Indicator (SPI) indicates inflation at a week on week basis impacting everything from food to cigarettes to gas. Gas increased a whopping 108.38 percent in Q1, while cigarettes were up by 76.45 percent. Chicken, bananas, cooking oil, ghee and prepared tea were all stirred into the formula of high inflation.
It was five months ago that the SPI surged to 42.7 percent when wheat flour prices skyrocketed to an all-time high when the country was fighting massive floods.
Pakistan has applied for a USD 6.5 billion bailout package under the IMF’s Extended Fund Facility. To appease the IMF and get closer to gaining approval for the USD 1.1 billion tranche, the government doubled gas charges to PRs 295 from its previous PRs 147.57. The permeating impact of high cost of living has left the average Pakistani digging deep into a pocket that is now becoming non-existent.
Inflationary pressures are expected to intensify as more measures are in the pipeline for implementation including tax measures and price adjustments for electricity, petroleum and gas, all similar paradigms to measures being implemented in Sri Lanka.
