Inflation in Pakistan jumped to 9% in September 2020

 Prices of sugar, milk, vegetables, medicines, wheat, chicken and other items increased 

According to new data of Pakistan Bureau of Statistics, Inflation has jumped to 9% year-on-year in September. Month-on-month headline inflation rose 1.5% compared to 0.6% in August when it climbed to 8.21%.

Average inflation edged up 8.85% during the first quarter of the fiscal, but remained within the 7% to 9% band forecast for the entire year and was lower than last year’s figure of over 10%. The increase in the price of vegetables, chicken, fresh milk, pulses, wheat flour, sugar, eggs, and other food items has made the major impact.

Non-food items contributing to the spike included construction inputs, transport and health services. Food prices increased 14.7% as the rural population experienced higher hikes than urban dwellers.

Prices are predicted to increase further this month if electricity and gas prices go up as the government moves to revive the $6

billion IMF deal. The State Bank has already indicated the end of further monetary easing, which started in March to fight the economic impact of Covid-19.

A look at PBS data shows that prices have been rising in the country for over a year largely because of disruptions in food supply chains and periodic hikes in the administered prices of electricity and gas rather than a surge in demand for goods and services.

High inflation comes with a heavy economic cost that low- and middle-income groups know only too well. Even a small shock in prices causes the poor to cut essential expenditure to survive. Indeed, many families have no option but to send their young children to work. 

Controlling inflation, especially consistent hikes in prices of food, education, and healthcare, has always been a major challenge for the PTI government which has failed to shield the economy and the poor from this scourge.

                                                                R K Bhatti