When will inflation go down in pakistan ? All pakistani people are worried now and with the Pakistani government raising the prices of petroleum products twice a week, surely most households will be debating what will happen next, how the cost will go, and what will get worse. Highly technical reasons are not correct, but it is well known that the prices of petroleum products have a direct effect on inflation, and in a few days, you will reach any store and you will hear the news of an increase in prices of daily necessities and you Will be bitter.
Finance Minister Muftah Ismail has said that the government is still giving a subsidy of Rs 8 on petrol and Rs 23 on diesel, and in the budget to be presented on June 10, many issues will be resolved. However, the issue is not only petroleum products, but also NEPRA on Thursday approved an increase of Rs 7.91 per unit from July. This potential increase will directly impact the pockets of the general public, but it will also increase inflation.
What trends can the Pakistani people face?
“This increase is for everyone; the rich, the poor, and the middle class will all be affected, so it’s important to have a targeted angle,” Second, the rise in prices of petroleum products increases the cost of transportation, making food items more expensive. On the other hand, rising electricity prices increase the cost of doing business, raising fears that those who are currently on the margins will fall below the poverty line.
The government and most economists have repeatedly said that the increase was inevitable. Critics, however, believe that the burden is on the poorest people, who will suffer the most. The government had no choice but to seek help from the IMF and the IMF says that this problem should be removed.
“But the solution is to bring about reforms so that we, who are putting the burden on the people in the form of inflation, will see hope. If we had given a mid-term reform plan to the IMF, it is said that the ruling coalition did not have it because there was no direction, so the problem is even greater because of this uncertainty. What will be the result?
How long will the rise in inflation continue? Is there any possibility of reduction?
In 2022 presently, the overall inflation rate in Pakistan is 14%, while the inflation rate related to food items alone is around 20%. According to experts’ estimates, it is not expected to decrease for almost a year. Interest rates will also go up, and the economy that has spread too much will now shrink. So now, the inflation rate is expected to come down after June 2023. “It has profound economic effects, and it will have political implications because, you see, there’s been a strong reaction from the people that you’re not asking the elite to sacrifice the whole burden.” It is being imposed on the people.
Will the economy recover from these increases?
It is important to understand that the economy’s growth rate is 6%, but Pakistan’s real challenge is a double deficit. Our imports are higher, exports are lower, while our expenditure is higher, but our revenue is lower. “It will hurt the economy. “But Pakistan needs to develop a long-term reform strategy for economic growth. That’sThat’s why we go to the IMF every five years unless we change the economy’s structure and reduce the deficit.” So we will be stuck in this cycle.
So how can the structure of the economy be changed?
“Our population is growing, but the productivity of our real sectors is not increasing. We have to import things when consumption increases due to population growth. “When we import, we need dollars for that. Dollars come to you from exports. Exports increase when there is an increase in investment, and it goes into the productive sectors. We have become a commercial economy, not a productive one. “As our dependence on imports grows, and we do not have a foreign exchange, we need to change the structure,” “We need to add value to agriculture; our textile industry should make suits instead of clothes to increase our exchange rate,” Most importantly, we need to make concessions and encourage investment in our knowledge-based economy and information technology. ” “Otherwise, countries that are dependent on oil imports and import foodstuffs because they cannot control the population, their situation seems very difficult.
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