Inflation

Society Pakistan & World Affairs
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I am going to use this thread to accumulate some news stories/articles about inflation and how it’s impacting the people in Pak. Lets begin with the latest numbers:

Food inflation up 8.62pc in August](http://www.dawn.com/2007/09/12/ebr1.htm)

  • By Mubarak Zeb Khan*

ISLAMABAD, Sept 11: Food inflation geared to 8.62 per cent in August 2007 over the same month last year owing to persistent increase in price of essential kitchen items, says official figures of Federal Bureau of Statistics (FBS) issued on Tuesday.

A combination of supply and demand factors had been fuelling the food inflation as selling of essential commodities through utility stores at subsidised rates had also not been helpful in checking rise in food prices during the first two months of this fiscal.

On the other hand, the overall inflation registered a modest increase of 6.45 per cent in August 2007 over the corresponding month last year.

The slow growth in overall inflation in the month under review was largely attributed to a sharp reduction in core inflation — non-food non-energy.

The government had projected 6.5 per cent inflation target to be achieved during the current fiscal.

Tight monetary policy pursued by State Bank of Pakistan was mainly responsible for this secular decline in core inflation. Non-food inflation also exhibited the same declining trend – as it at 2.17 per cent in August, 2007 over the corresponding month of last year.

This showed that the overall inflation has been driven by higher food prices during the first two months of the current fiscal year as opposed to last year where the major culprit was non-food inflation.

Apart from the increase in food items, the medicare charges and education went up by 9.77pc and 6.17pc in August 2007 over the same month last year. It translated into higher charges of the basic facilities like life saving drugs and education fees prices sky-rocketed thus affecting the monthly budgets.

The house rent recorded a growth of 7.17pc in August 2007, textile products 7.51pc, household furniture 6.59pc, fuel and light 2.17pc and laundry 5.07pc over the same month last year. Only transport and communication charges witnessed a negative growth of 2.98pc.

The food items which showed an increase in August 2007 were: tomatoes (43.74pc), chicken farm (29.08pc), onions (17.94pc), pulse masoor (7.81pc), vegetables (6.53pc), mustard oil (3.86pc), cooking oil (3.65pc), milk powder (3.61pc), maida (2.53pc), betel leaves and nuts (2.49pc), milk products (2.39pc), spices (2pc), potatoes (1.92pc), vegetable ghee (1.83pc), sugar (1.76pc), sweets and nimco (1.49pc), cereals (1.42pc), pulse gram (1.39pc), bakery and confectionery (1.36pc), wheat flour (1.27pc), rice (1.07pc) and milk fresh (1pc).

The marriage hall charges rose by 2.31pc), furniture ready made 1.79pc, plastic products 1.08pc, furnishing 1.07pc, tyre and tube 1.08pc, jewellery 1.14pc and shaving articles 0.9pc.

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Re: Inflation

Pakistan is costlier in food prices than India, BD](http://www.dawn.com/2007/09/11/ebr3.htm)

  • By Khaleeq Kiani

ISLAMABAD, Sept 10: Pakistan is the costliest among three major south Asian countries, including India and Bangladesh, in terms of essential food items, despite being primarily an agriculture economy, according to official statistics.

This is despite the fact that Pakistan had bumper crops, including those of wheat, sugarcane and gram, over the two consecutive years. Food inflation has been a major challenge in Pakistan over the last three years, in some cases, beyond 15 per cent.

Sri Lanka, which is more import-dependant than self-reliant is, however, costlier when compared with India and Pakistan.

Informed sources told Dawn that a meeting of the Economic Coordination Committee (ECC) of the cabinet, presided over by Prime Minister Shaukat Aziz, was briefed about the situation through an “analysis of regional prices of critical consumer items.

Dr Ashfaq H. Khan, economic adviser to the finance ministry, had announced that Pakistan was cheapest in the region when seen in the context of food inflation.

Minutes of the ECC meeting held on August 29, available with Dawn, however, reveal a totally different picture. Of 31 essential items, the prices of 16 items are higher by 32.7 per cent in Pakistan than India. Prices of the remaining 15 items were higher in India, but with an average margin of 26.2 per cent.

The comparison with prices in Bangladesh was even more deplorable. According to the minutes, the prices of 16 basic food items out of 27 recorded were higher in Pakistan as compared to Bangladesh, with an average margin of 45 per cent.

Prices of the remaining 11 items were lower in Pakistan by a small margin of 21 per cent when compared with basic food items in Bangladesh.The documents suggest that the prices of 20 items out of 25 were lower in Pakistan when compared with Sri Lanka, with an average margin of 30.7 per cent.

Prices of the remaining five items were higher by an average margin of 21.6 per cent.

The only decision the ECC took on this analysis was that the prices of loose edible oil and Irri rice should be compared in future, instead of branded oil and basmati rice.

“The Planning Commission was advised to focus on atta, ghee, sugar, dal chana, tea and rice,” according to the minutes of the meeting.Reviewing the trend of change in prices, the ECC noted that average consumer prices of 22 items had increased (during the week ending Aug 23). The prices of seven items have decreased, while those of 24 items have remained unchanged.

And despite an increase in prices of many items, the sensitive price index in the case of combined income group for 53 essential items covering 17 urban centres, increased by 0.29 per cent over the previous week.The ECC was also briefed about the recommendations of the inter-ministerial committee on core food inflation, but the prime minister had directed that the matter be placed before the next ECC meeting. The meeting was informed that timing of a policy measure was crucial to address core food inflation problems, the sources said.

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Re: Inflation

Wheat smuggling unabated](http://www.dawn.com/2007/09/13/top8.htm)

** By Khaleeq Kiani**

ISLAMABAD, Sept 12: Undeterred by government’s rhetoric against hoarders, an estimated 1.5 million tonnes of wheat has so far been smuggled out of Pakistan over the last 45 days as domestic flour prices increased by almost 40 per cent since February this year, it is learnt.

Advisor to the finance ministry Dr. Ashfaq Hassan Khan conceded at a press conference on Tuesday that more than two million tonnes of wheat was being hoarded by black marketers.

Wheat smuggling was going on through almost all borders – Wagah, Sindh and Balochistan – in addition to normal and legal exports to Afghanistan. “About 200 truckloads of wheat from Sindh alone leave for Indian border every day,” said a senior government official who has a formal role in essential commodities.

The official told Dawn that this year wheat prices were unusually lower in Pakistan than the rates in the international market and in India the commodity is costlier by about 40 per cent offering great profit margin to the black-marketers. Even after paying 15 per cent of their margin for border-crossing they get away with 20-25 per cent profit and there are many safe crossing points near Wagah and Khokhropar, he added.

Wheat prices have surged by almost 38 per cent to Rs1,450 per 100kg from about Rs1,050 in February despite record production of 23.5 million tonnes which is much higher than the estimated 22 million tonnes of domestic consumption and some exports to Afghanistan. In public sector its rate is fixed at Rs1,215 per 100kg.

The official said the nation was lucky to have bumper crop this year providing surplus production when the international market witnessed wheat shortage and prices touched new peaks.

“We have failed to control prices despite surplus production, thanks to the mafia within the government. Imagine what havoc might have been played with the people had there been a shortage at home,” said the official saying there was a strong case to investigate which circumstances had forced the government to allow export of more than five million tonnes of wheat a few months back.

Besides illegal exports to India, the official said, Pakistani wheat was being smuggled to Iran through Balochistan-Taftan border and reaching up to some Central Asian states. This, he said, was in addition to legal exports of wheat by-products which the government banned in the last week of August.

The federal government has been warning the provincial governments to check flour prices by taking action against the hoarders. Recently, provincial governments defied centre’s instructions for releasing maximum wheat stocks to flour mills between September 1 and 7, but they started very limited releases after the deadline.

The official said a number of people had misused export permits issued early this year for exporting about five million tonnes of wheat. They purchased high-quantity wheat, which was being smuggled now. Many people also misappropriated bank loans they had obtained for wheat exports, he added.

Wheat stocks in the public sector stood at 4.8 million tonnes on July 15 this year but dropped to 4.646 million tonnes as of September 9, including those with provincial governments and the Pakistan Agricultural Storage & Supplies Corporation (Passco) indicating how slow has been the public sector releases while domestic prices continued to soar during this period.

A senior official confirmed that no steps were afoot to control wheat smuggling.

and now for some sprinkling of the usual good news

IMF lauds economic policies, reforms](http://www.dawn.com/2007/09/11/ebr12.htm)

By Our Reporter
ISLAMABAD, Sept 10: Prime Minister Shaukat Aziz said on Monday International Monitory Fund (IMF) had played an important role in Pakistan’s economic turnaround and would continue to maintain fiscal discipline and conformity to its structural reform agenda.

He was talking to an International Monitory Fund delegation headed by Director for Middle East and Central Asia Mohsin Khan who called on him at the Prime Minister’s House. The prime minister appreciated IMF’s help and technical support in fostering economic growth in Pakistan.

He said the successful implementation of wide ranging structural reforms and good macroeconomic policies had transformed Pakistan’s economy into a stable and resurgent one. As a result of the high economic growth, he said, the energy demands have also increased manifold.

In order to improve the transmission, distribution and generation of electricity Wapda and Pepco have been separated and hoped that this restructuring would improve the efficiency to help address consumers’ need to get reliable and continuous supply of electricity.

He said that after having gained economic strength the government was now in a position to transfer the benefits of economic growth to the people and as a result there had been a visible improvement in the living standards of the people. Per capita income has been doubled, index of human development is improving and unemployment is decreasing.

:biggthumb

Naming Cities
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Re: Inflation

pak, like all countries, has to deal with global economic reality. to see how pak is dealing with inflation, check out inflation rates in countries like sri lanka, bangladesh, turkey and saudi arabia. what you will find is that pak will be in the middle which is what you should expect given the khusta haaluth of pak treasury until few years ago.

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Re: Inflation

There is a comparison of food prices in Bengladesh, India and Pak in one of the stories. Check it out. :biggthumb

The Random Thread
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Re: Inflation

flame of life, dont believe everything you read in pak newspapers especially in matters relating to the economy. most journalists are prejudiced and naliaqh and feel no shame in lying to score political points:

http://www.thedailystar.net/story.php?nid=3879

Rice is our staple food, and it has always been a tough job balancing its price in a way that neither deprives the growers nor pummels the urban consumers. Ours is an agrarian economy and rice is the mainstay of the total agricultural output. As a result, the slightest of variations in rice price has a cascading effect on the overall economy.

Inflation rate of food items reached 13 percent in July, measured on a point-to-point basis, according to figures from the Bangladesh Bureau of Statistics (BBS). Overall inflation rate on point-to-point basis also crossed double digit and stood at 10.10 percent during the same month, it was 9.20 percent in June.

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Re: Inflation

Flame of life, kindly add a comment to your cut and paste contribution in post number 2 and 3. Other wise I will have to ask the forum moderators to force you to OBEY and follow the forum guidelines.

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Re: Inflation

wait..u just told me not to believe what Dawn said yet u just quoted figures from the official statistic Bureau of a corrupt, third world country? Why EXACTLY should I believe those?

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Re: Inflation

Only first post is required to have “comments” :mocking:

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Re: Inflation

hey I thought I posted a diversionary article in there too :aq:

kher bhai, the stats I provided r released by the govt. itself so unless Shauky pal wants to shoot himself in the foot by releasing exaggerated figures of inflation just before the election, I don’t see the point. If anything these r understated :biggthumb

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Re: Inflation

minimum wage numbers is a funky number but outside govt. jobs, how many people r actually getting paid even that that? One word: Enforcement?