AS per data released by Pakistan Bureau of Statistics (PBS), country’s inflation rate has touched 14.56 percent in January 2020 — highest rate in last more than ten years. The IMF had projected that inflation would decelerate slightly to 11.8 percent in ongoing fiscal year (FY-2020), the government estimated it in the range of 11 percent and 13 percent while the SBP projections were 11 to 12 percent for the year.
The ground reality is quite bitter yet regrettably the State Bank of Pakistan has tried to sugar-coat it by claiming that recent spike in inflation pressure was ‘transitory’ phenomenon, telling people that headline inflation of 14.6% was broadly in line with projections of the central bank. No doubt, latest record increase comes in the wake of wheat flour crisis and a hike in prices of sugar, chicken and vegetables but the phenomenon is not transitory in nature as claimed by the SBP. Wheat flour prices have taken their toll as bread prices have been increased by 20% and there are no indications of any reversal in the overall price of flour in near future. Similarly, sugar industry is acting like cartel and instead of reducing prices, it is justifying them on flimsy grounds. Otherwise too, there is consensus among economists that inflation is on higher side due to government’s economic policies of increasing electricity and gas prices, depreciating the currency, imposing duties on imported commodities and enhancing oil prices. All this is in sharp contrast to what people were told by top leadership of the country that year 2020 would be year of relief for them. Even if the record inflation was as per projections of the institutions concerned, this is also reflective of their failure to take measures to address the challenge.
Unconvincing clarification
