The Asian Development Bank (ADB) has forecast higher inflation projection for Pakistan, while saying that adjustments to energy tariffs and higher global commodity prices are expected to exert upward pressure on domestic prices. The announcement of ADB forecast has coincided with the 100 basis points hike in policy rate by State Bank of Pakistan. In other words, the policy rate has now soared to 9.75 percent from 8.75 percent. The central bank’s step is aimed at checking inflationary pressures because rising inflation and price hike have already exerted a lot of pressure on the government, which appears to have failed to provide any meaningful relief to the masses. But the questions that need plausible answers are: will the current policy rate hike tame inflation? Are food prices going to come down anytime soon?

Omar Farooq (Karachi)

Copyright Business Recorder, 2021