LAHORE: Former finance minister Dr Hafiz A Pasha said on Tuesday that a simultaneous decrease in the Consumer Price Index (CPI) and an increase in Sensitive Price Index (SPI) shown in the latest data of the Federal Bureau of Statistics (FBS) is quite confusing.
It may be noted that the FBS data suggests that the inflation rate eased to 5.65 percent in January from 8 percent the previous month. A decrease in the prices of vegetables, pulses, eggs, spices and chicken helped bring down the CPI, the bureau said. However, it is worth noting that while the CPI has dropped to 5.65 percent in the month of January from earlier 8 percent, the SPI has increased to 7.5 percent in the same month from earlier 6 percent.
When pointed out to Dr Pasha, he said: “These two opposite developments could not take place simultaneously,” adding that it is only possible if the FBS was counting facilities of free meals and refuge centres under the head of SPI. He agreed with the prime minister who has expressed the hope a day earlier that dollar inflows would help arrest price hike in the country. According to him, the government was facing a shortage of foreign exchange when it took over back in 2018 as the Pakistani currency was under pressure due to the import of costlier goods.
However, he added the supply chain mechanism played a vital role in controlling inflation domestically. “But the government had failed to ensure a timely import of wheat when there was a shortage of 10 percent in its production domestically. Similarly, the government had exported sugar on the alleged wrong production data,” he said. Dr Asif Beg Mirza, another financial expert, said dollar inflows in the country would reduce vulnerability of exchange rate that would have an impact on the demand of dollar. “At present, our foreign exchange reserves are half of Bangladesh and a continuous inflow of dollars would bring stability to prices in the long run,” he said. Meanwhile, some other experts, while requesting anonymity, said it appeared that the FBS was manipulating data due to the rising public pressure on the government with reference to price hike. There is a consensus among these experts that prices of eatables and medicines have registered a substantial increase over the last two and a half years. They said a reduction in cotton and wheat crop in rural economy had also pushed the people to move to urban areas. But the FBS has shown a mere increase of 4 percent in rents of residences, which is again questioned by these circles.
Copyright Business Recorder, 2021
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