Over the past five months, the eagerly awaited relief for consumers, promised by global economic changes such as falling world commodity prices, decreased logistic costs, and a stable exchange rate, remains notably absent. The culprit behind this absence lies in an ineffective price-checking mechanism that empowers manufacturers and retailers to withhold the full benefits of reduced global prices, transportation costs, and a stable rupee.
During the initial five months of the fiscal year, food imports experienced a significant 16% drop, plummeting to $3.35 billion from the previous year’s $4 billion. Despite this decline, the promised relief for the masses, especially the low-income class, has not materialized. The dominance of wheat, palm oil, and pulses in food imports leaves many essential items untouched by the supposed economic reprieve.
The burden of exorbitant prices for essential edibles, combined with hefty utility bills, disproportionately affects low- and middle-income families. The failure to pass on the advantages of lower global prices has forced families to make challenging decisions, from restricting appliance usage to cutting back on basic food necessities.
Efforts to curb hoarding, as exemplified by the sugar crackdown earlier this year, provided only temporary relief as prices surged once enforcement was suspended. A similar fate awaited the campaign against wheat hoarding, succumbing to pressure from influential millers. Despite import initiatives targeting the demand-supply gap, wheat prices persist at elevated levels due to delayed shipments and conflicting estimates of demand and supply.
The recurring theme of crackdowns losing steam and succumbing to external pressures highlights the need for the government to introduce sustained and robust regulatory measures. Enforcing market regulations becomes ever more urgent to address these challenges. Without tackling hoarding and its impact on prices, the goal of providing consistent relief to the Pakistani consumer remains elusive.
The outgoing year was characterized by hyper-inflation and extreme financial challenges, making life miserable for commoners and impacting the upper middle class. The year 2023, marked by two changes in government amidst political instability, proved tough economically. The prices of POL products, gas, and electricity soared to unprecedented levels. Despite a temporary dip in petrol prices, the auto-corrected domestic gas consumption tariff, raised by around 300 percent, came as a rude shock in a country heavily dependent on imported LPG, LNG, and expensive power producers.
The PBS recorded short-term inflation over 40 percent in the last quarter of the year, primarily driven by a rise in energy prices. This rise has almost nullified exports, rendering them uncompetitive. Although there was some relief as the dollar’s flight was arrested and the rupee stabilized, managing micro-economics remained a game of cat and mouse. The crackdown on trans-border smuggling, black-marketers, and hoarders was appreciated but lacked sustainability as local district administrations failed to micro-manage prices.
To address inflation, the government must focus on curbing energy prices and providing instant relief on food products. Despite good agricultural produce, the prices of vegetables and fruits remain out of reach for common men. The confusion in economic management policies further complicates the issue of importing cereals, rice, and wheat. A comprehensive approach is needed to rectify these issues and fulfill the promise of economic relief for the people.