Pakistan’s inflation rate has crossed 27 percent and due to the recent floods, it is feared that the inflation rate may reach higher levels in September.
Fear of rising inflation due to floods in Pakistan
The time ahead is going to be very challenging for Pakistan. In fact, according to the IMF, the situation in the country is becoming the same as it is in Sri Lanka. The IMF has warned that due to the record increase in inflation, protests may increase in the country, due to which the situation may become more unstable. In the month of August, the inflation rate of Pakistan has reached 27.3 percent, which is the highest level of 47 years. According to the IMF, the biggest danger is that the impact of the devastation caused by the floods in Pakistan is yet to be seen.
what is the biggest challenge
Inflation rate in Pakistan is at 27.3 percent. These levels were first seen in 1975. It is feared that the situation may get worse as the effect of the floods in Pakistan on inflation is yet to be seen. It is expected that inflation may reach even higher levels in September. The IMF, in its review of the country’s economy, has said that due to the rise in food prices and fuel prices, there may be protests and instability in the society. In fact, the IMF is reviewing the situation in Pakistan for relief measures. These facts have come to the fore in this review itself. IMF can give $ 6 billion aid to Pakistan. This may help the economy of Pakistan, but the pressure on the government of Pakistan will increase. Because the government will have to cut spending on the guidelines of the IMF. People may also have to face inflation due to reduction in subsidies.
IMF’s strictness also put pressure on the government
The IMF has asked the government of Pakistan to take many such steps so that the economic situation can be strengthened. The most important in this is to reduce the subsidy burden. This includes increasing the prices of petrol and diesel by Rs 30 and Rs 15. In this move, the government has imposed a duty of Rs 37.5 per liter on oil. The decision to impose duty in excess of the limit was taken so that the duty on diesel could be reduced. With the rise in oil prices, there is a possibility of further pressure on inflation. The IMF clearly said that the policy of giving subsidy is still a risk to the economy. According to the IMF report, the removal of subsidies will increase pressure from society and political parties and this will increase the possibilities of protest. The direct impact of which will be seen on policies and reforms. This threat may increase further due to the unstable government of Pakistan.