Economists list factors behind rising inflation

"Would the Pakistan Bureau of Statistics (PBS) let Pakistanis know where atta can be bought for Rs 40 per/kg so that people can go there to buy atta," it was stated by former Finance Minister Dr Hafiz Pasha.

"It is unconceivable that the price of atta was 40 rupees per/kg on Friday anywhere in Pakistan," Dr Pasha added. PBS maintains that the price cited is that fixed by the government, however, an anecdotal survey carried out by this correspondent, revealed that consumers maintain that where available, the atta sold at this price is not fit for human consumption.

PBS, however, claims SPI covers 17 urban centres and is not calculated on the basis of government fixed prices but on the basis of prevailing market rates.

Business Recorder survey revealed that atta was being sold in Islamabad at Rs 56 per/kg.

This is a blatant data manipulation and that too done not cleverly at all, was the consensus of economists in an anecdotal survey carried out by this correspondent.

Rupee depreciation, high discount rate and rising utility tariffs instead of undertaking meaningful governance reforms are the prime reasons behind the increase in food inflation that is pulling people below the poverty line, former adviser to finance ministry Dr Ashfaque Hasan Khan said while talking to Business Recorder.

He further said that food inflation which is currently over 22 percent is fuelling poverty in the country. Khan said that owing to depreciation price of petroleum and products increased manifold, with a consequent impact on transport costs which are ultimately passed on to the consumers.

He said that the discount rate is very high which is resulting in increase in the cost of borrowing. If discount rate goes up, the working capital cost of industries rises and this increase in input costs is passed on to the consumers.

Khan said that the increase in price of utilities-gas and electricity-is also fuelling input costs which are also passed on to the consumers and is an acknowledgment that government has failed to implement governance reforms. Khan added, "Raising prices is not reform, but an acknowledgment of the failure to implement reforms".

"Wheat sets the benchmark price for all food items. If wheat price goes up, the prices of an entire range of food items will increase", Khan added. Ashfaque Hassan Khan added that 40 percent Pakistanis are below the poverty line spending 55-60 percent of their income on food. If food price rises the people are pushed below the poverty line in the country, he concluded.