The woes of the masses will continue as crippling inflation will prevail for the next six months across the country and the Rupee will depreciate even more against the US Dollar despite Saudi Arabia’s efforts to shore up Pakistan’s economy.
According to a report by the Economist Intelligence Unit (EIU), the research and analysis division of The Economist, persistent inflation over the next six months will be fueled by rising import bills coupled with skyrocketing commodity prices in the international market as the global economy continues its steady recovery from the havoc wreaked by the Coronavirus pandemic.
As far as the value of the Pakistani Rupee against the US Dollar is concerned, it will continue to tread on the current depreciatory path with the same intensity due to the country’s widening trade deficit regardless of the financial assistance package recently announced by Saudi Arabia.
The EIU report added that the impact of soaring oil prices in the global market was passed on by the government to the public that fueled the countrywide inflation, particularly in the food, utility, and petroleum sectors.
In October, the petroleum prices jumped up by 14.4% YoY, the tariffs of essential utilities including electricity, gas, and water also increased by 12% YoY, and the food inflation rose to 9.2% YoY.
The prices of essential commodities, including food, utilities, and petroleum products across the country will remain elevated till the end of H1 2022 due to increased prices in the international market amid the slow recovery of the global economy.
The EIU forecast comes just after Prime Minister Imran Khan announced the country’s biggest relief package worth Rs. 120 billion under which essential commodities will be subsidized for 53% of the country’s population.
Under the Rs. 120 billion relief package, 130 million of the country’s population will receive a 30% subsidy on per-unit purchase of three essential commodities—oil/ghee, flour, and pulses— for the next six months.
