Finance Ministry Clarify Report On Inflation

ISLAMABAD, (UrduPoint / Pakistan Point News - 22nd Oct, 2021 ) :The Ministry of finance clarified on Thursday the some media report that 'Pakistan has been listed as the fourth highest in terms of inflation in the world.' A section of press carried news referring to the report by "The Economist" titled 'Pakistan has been listed as the fourth highest in terms of inflation in the world', said a press release issued.

The Economist magazine has reported in its latest edition set of countries (43) without mentioning the exact comparison of Pakistan with similar economies.

As per the Economist sheet, the months mentioned in CPI are not the same (August and September). Base is different.

According to press release issued , Pakistan stands at the 30th place in the world in inflation index, while Venezuela stands at first, Labanon at third and Syria at number four.

It is pertinent to mention that the Government is taking a range of administrative, policy and relief measures to provide maximum relief to the general public.

Government has decided to release wheat at Rs. 1950 per 40 kg to ease out its price and ensure smooth supply across the country.

The Provincial government of Punjab and Islamabad administration have ensured daily release of wheat at government notified price.

This has reduced upward pressure on the prices of wheat flour bags. The other Provincial governments have started following the daily release of wheat to ensure Rs. 1100 per 20kg price across the country.

Similarly, the Government has set the price of sugar at Rs. 90/kg across the country.

The government has absorbed the price differential of the imported sugar and making it available to the masses at government's fixed price. The crushing of sugarcane crop by the end of October 2021 (in Sindh) and in November 2021 (in Punjab) will further reduce the pressure on prices of sugar in local markets throughout the country.

Under Ehsaas Emergency Cash Program, the government has disbursed Rs.179.3 billion to 14.8 million beneficiaries to provide immediate cash relief of Rs.12,000 whose livelihood has been severely affected by the pandemic.

The pro-poor allocation under BISP in 2018 amounting to Rs.121 billion has been enhanced to Rs. 260 billion in FY 2022 under the Ehsaas program.

Furthermore, the Government has imported wheat and sugar to maintain strategic reserves of staple food commodities.

Strategy for reducing middleman's higher profit margin of essential items by reviewing the entire value chain is being worked out in consultation with Provincial Chief Secretaries.

In order to reduce the inflationary pressure, the Government has discontinued borrowing from SBP. During 1st July to 24th September, FY2022, government has retired Rs 274.9 billion to SBP against the retirement of Rs 332.8 billion during the same period of last year.

Government is implementing National Agriculture Emergency Program amounting to Rs. 277 billion to uplift agriculture and livestock sector on modern lines and to enhance the production level of major and minor crops.

The outlook for crops of cotton, sugarcane, rice and maize is looking promising which will not only stimulate economic growth but also ensure higher income for the farmers.

At present, pulses prices are witnessing a declining trend. Moreover, the Government is keeping strict control on export of onions and tomatoes which has stabilized the prices of vegetables in domestic markets.

Government is also providing essentials items at subsidized prices through a network of Sasta Sahulat Bazars and chain of Utility Stores throughout the country.

In summary, Government is trying to balance the increase in petroleum prices by providing maximum relief in food commodities in order to balance the budget of the marginalized segments of the society wherein the food items constitute the 34.58% of the overall household expenditure.

If we look at the international scenario, the producer price inflation is at 26-year high in China. The costly food prices are the biggest challenge for the governments all over the globe amid COVID-19. According to Food and Agricultural Organization (FAO), the global food prices have risen by 33% in August, 2021 as compared to similar period last year.

The Brent oil has crossed the $85 per barrel recently.

This is the highest price since 2018. Similarly, the average coal prices in last quarter were $167.52 per ton as compared to $52 per ton last year.

Therefore inflation is a global challenge and Pakistan is not an exception.