PAKISTAN’S ANNUAL INFLATION RATE JUMPS FROM 27.26 TO 35.37 THIS YEAR MARKING A 50-YEAR HIGH
A near-famine-like situation in Pakistan as its inflation rate rose to 35.37. The Pakistan central bank’s reserves in Foreign Exchange drop down to $4.2 billion, this sudden drop led to an economic crisis in the country which now led to inflation.
Pakistan has seen the highest inflammation rate in the past five decades, it is reported that the month-on-month inflation was at 3.72%. the previous year’s average was 27.26 which increased by around 8% this year.
Inflation is a sudden raise in the prices of commodities and services. The inflation in Pakistan has led to a weakening of the public’s purchasing power, the rates for a minimal number of commodities and services hit peaks leading to people failing to meet them.
Pakistani government failed to meet the conditions of the International Monetary Fund (IMF) which could’ve helped in overcoming the situation. IMF is a financial agency with the aim to erase the world’s poverty and assist countries during crises, but unfortunately, Pakistan failed to get the benefits as it scrambled to meet the IMF conditions.
It’s the time of Ramadan and we see people starving and not fasting, the plight of the poor is heartbreaking. The low purchasing power of people led to them committing street crimes and shoplifting.
The government is trying to get hold of the situation by distributing rations and Ramadan alms in places, but people’s hunger stepped over their patience and led to stampedes taking lives.
A piece of recent news covers the death of 12 in a stampede at a factory in Karachi while people rushed to collect Ramadan alms.
At least 26 deaths due to stampedes were reported in the country despite the military and police trying to control and regulate the crowd.
Inflation
Inflation is a situation where a country or a place, faces a drastic increase in rates of goods and services. Inflation reduces the value of currency which means it shows a decline in the number of goods and services a unit of currency can buy. Inflation is caused by:
Inflation is caused by:
- Increase in wages – when companies increase the wages of employees, they still try to attain profit by increasing the cost of the product. So, an increase in the price of a product decreases the ability of a man to buy the product.
- Decline in productivity – when a company sees less production, which means fewer sales – this puts pressure on the cost of the product in the market and might cause a raise in the price leading to inflation.
- Consumer spending – when the demand for a product increases, and the consumer is willing to pay any amount, companies reap this. Higher demand means higher supply, so the workload on companies and factories increases, increasing their expenses and hence they take it on the product’s cost.
There are many reasons for inflation to occur. The damage that inflation might cause is impactful and destroys the country’s economy.
The Pakistani government has to do its reforms as soon as possible and get the situation under control, failing which may cause chaos in the livelihood of its citizens. The continuation of the same situation might lead to hyperinflation that might collapse the country economically.
Let’s hope and look forward to the country’s betterment, may this end as soon as possible.