A report released by the Finance Ministry on Thursday highlighted the encouraging trend of continued reduction in inflation as its rate in December 2024 dropped to its lowest levels in 80 months. It showed that the inflation rate for the first six months of the fiscal year 2024 stood at 7.2%, compared to 28.8% last year. The report highlights that the stability of the exchange rate, fiscal discipline and improved supply chains have played a significant role in reducing inflation. Furthermore, the government’s strict actions against illegal foreign exchange companies, smuggling and hoarding have had a positive impact on the economy.
This positive trend is surely attributable to the prudent policies being pursued by the Finance Ministry and the State Bank of Pakistan (SBP), which initially put immense pressure on the common man but with the passage of time they are becoming instrumental in providing relief to the masses. While the government can legitimately take credit for positive economic indicators and reduction in inflation, the phenomenon confirms that the inflation was mainly the product of governmental policies vis-à-vis taxation, exchange rate, prices of POL products and tariffs of electricity and gas. At that time, the government attributed the rising inflation to the trends in the international market but the situation changed significantly when policy changes were made to stabilize the exchange rate, rationalize taxes and provide relief to the consumers when prices of oil dropped in the global market. According to the latest figures released by the Federal Bureau of Statistics, the governments policy measures, administrative actions and relief steps have effectively helped control inflationary pressures and people have taken a sigh of relief. However, these trends depend much on future policies of the government as there are apprehensions that the power and gas tariffs might be adjusted upwards in line with commitments with the IMF and more taxes imposed to meet the tax collection target as agreed with the global lender. People, however, expect the electricity tariff to come down in fulfillment of repeated assertions of the government leadership and revision of agreements with the Independent Power Producers (IPPs). We also hope that the budget strategy for the next financial year will, instead of putting pressure on the common man, will ease their lives.
