PIAF chief attributes soaring inflation to government's economic policies

The Pakistan Industrial and Traders Association Front (PIAF) has urged the government to take concrete measures for easing out inflation that had touched 12 years high level of 14.6 percent in January 2020.

PIAF Chairman Mian Nauman Kabir in a statement on Saturday said that inflation is on higher side due to the impact of government's economic policies of soaring fuel rates, enhancing power and gas tariff, depreciating the local currency and imposing exorbitant duties on imported industry raw material.

He asked the Ministry of Finance to devise a strategy to control and ease out the impact of inflation. He said that policy measures like zero borrowing by government from SBP in current FY and ECC (Economic Coordination Committee) permission for import of 0.3 million tons of wheat would decrease the local wheat price. Reduction in fiscal deficit, primary surplus in first half of FY 2020; monetary tightening and demand compression by austerity; complete restriction on supplementary grants are positive examples, he added.

Nauman Kabir said that major factor contributing to higher inflation was the global price impact due to international commodity prices like Palm oil increased by 43.9 percent, soybean oil by 12.8 percent, crude oil by 16.6 percent also pushed up the domestic prices. Downward trajectory in crude oil in the market will result in downward pattern in domestic prices in coming months, he added.

PIAF senior vice chairman Nasir Hameed said that the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal and provincial levels and favourable weather can bring in better results in easing out inflation and sustain the economy towards growth and productivity.

He said that adverse effects of pre-monsoon rains on wheat crop, disruption of supply chain of essential items, delay in harvest and arrival of crop in the market and lower production of vegetables, including tomato in Sindh, led to a higher food inflation but the change of weather and better supply of potatoes, tomatoes and onions should result in smooth supply and decrease price pressure," he added.