HCSTSI chief commends govts for reining in inflation

HYDERABAD: Muhammad Farooq Shaikhani, President, Hyderabad Chamber of Small Traders & Small Industry, commended the federal and provincial governments for their efforts to control inflation in Pakistan.

He noted that in recent weeks, the prices of essential food items such as flour, chicken, pulses and vegetables have significantly decreased. The importation of vegetables has particularly impacted the prices of tomatoes, onions and other produce. Additionally, the prices of petroleum products have dropped by more than 20 rupees over the past two months. With the decline in global petroleum prices, petrol is expected to become even cheaper in June.

However, Shaikhani pointed out that despite the government’s efforts, the benefits of reduced inflation are not reaching common people. Instead, only stockiest, wholesalers and retailers are reaping advantages of the price reductions. He affirmed that even with expected decrease in petrol prices, transportation fares have not been adjusted accordingly.

Shaikhani stated that economic performance reports from the Asian Development Bank, State Bank and Bureau of Statistics indicate that Pakistan’s economy has been on the right track for the past nine months. If this positive trend continues, inflation is expected to decrease to 15 percent by 2025. He also highlighted a recent statement from the IMF praising the Pakistani government’s efforts to control inflation and reduce government expenditure. According to Finance Minister Muhammad Aurangzeb, Pakistan has initiated negotiations with the IMF for a new multi-billion dollar loan agreement. The goal is to raise the tax and capital investment rate to 15 percent of GDP, which is a promising development for the country’s economy.

He questioned whether the Pakistani government will be able to maintain these reduced prices, especially with the upcoming budget next month. Many economists predict that the current relief for people and traders is temporary, anticipating that the new budget will bring higher inflation rates and increased taxes across various sectors. He stressed the need for a professional mechanism to permanently control inflation in the country. This requires strengthening and mobilizing price control authorities nationwide, ensuring they monitor every stage from production to distribution to the common man. The Price Control Authority must oversee this process to ensure its effective functioning.

Shaikhani stated that long-term inflation in Pakistan cannot be controlled without reducing electricity and gas prices. Affordable electricity and gas would encourage industrialists to establish new industries, boosting the country’s exports and helping to manage the current account deficit and revolving debt. These measures would ultimately benefit both the general public and businesses by reducing inflation.

Copyright Business Recorder, 2024