Record inflation in Pakistan creating ‘unprecedented hardships’ for country’s poor — experts

A trader drinks tea along an alley in a market in Rawalpindi on June 1, 2023. (Photo courtesy: AFP)
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Updated 05 June 2023
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Record inflation in Pakistan creating ‘unprecedented hardships’ for country’s poor — experts

  • Supply constraints, currency devaluation, hoarding are some of the key elements that continue to push inflation up in Pakistan
  • Financial experts call for increase in income-support program, minimum wage in public and private sector to mitigate the impact

KARACHI: The historic high inflation in Pakistan is hitting the poor and creating “unprecedented” hardships for the low-income groups, financial experts said on Friday, adding the situation has forced masses to spend much of their income on food.

The South Asian nation has been witnessing an increase in the inflation rate since late last year when the government took prior actions to comply with the conditions set by the International Monetary Fund (IMF) to revive a stalled $7 billion bailout program., stalled since November.

Pakistan reported 38 percent inflation in May as compared to 36.4 percent in April, on the back of rising food and energy prices and a massive currency devaluation. The Pakistani currency has devalued by around 30 percent since last June and played a major role in piling up the inflationary pressure. 

Food inflation in May rose by 48.65 percent on an annual basis, driven by an uptick in prices of tea that increased by 112.18 percent, potatoes 108.17 percent, wheat flour 99.02 percent and eggs by 90.27 percent, according to the Pakistan Bureau of Statistics (PBS).

“The record high inflation in Pakistan, in fact hyperinflation, in food item is affecting the financially vulnerable population creating unprecedented hardships for them, especially those living in rural and remote areas,” Dr. Ikramul Haq, a Lahore-based economist, told Arab News. 

Haq said the high cost of utilities, nearly 25 percent borrowing rate and extractive taxes were pushing businesses to raise the prices.

“Many are even closing down due to these factors pushing unemployment that is badly affecting the poor and the low-income groups,” he added. 

Haq said the stagnant economy and disrupted supply chains due to continued embargo on imports is a “sure recipe” for disaster for the vast majority of the population, especially those living below the poverty line.

Dr. Khaqan Najeeb, a former adviser to the Pakistani finance ministry, identified supply constraints, currency devaluation and hoarding as the key elements pushing the inflation rate up.

“This, of course, is unprecedented and affects the middle-, low-income and the vulnerable the most as more of their income is spent on food items,” Najeeb said.

Families affected by the rising inflation say they have made a drastic cut in their kitchen spending and are focusing only on most essential items. 

“We have cut down on some of the kitchen items, including cheese, bakery items and cereals,” said Fatima Ali, a housewife. “We have also reduced the quantity of items to strike a balance between income and expenditures.”

As the inflationary pressure continues to build up, people falling in the low-income group say the high inflation rate has deprived them of some of the protein-rich food items.

“We can’t think of mutton now,” said Ali Raza, an office assistant. “The prices of chicken are also getting out of our purchasing power so we have reduced purchasing.”

As Pakistan’s Finance Minister Ishaq Dar prepares to present budget for the next fiscal year, financial experts expect the government to take steps to mitigate the suffering of low-income groups.

“The mitigation aspects in the budget could be three in my opinion,” Najeeb said. “Substantial increase in the income-support program, rise in minimum wage, and increase in pensions and wages of the federal and provincial government employees, with the private sector following suit.”

Analysts hope that inflation would gradually start declining this month. 

“We anticipate monthly inflation to soften from June 2023 and gradually decline over the next 12 months, majorly because of base effect along with tight monetary and fiscal policy,” Muhammad Sohail, CEO of Karachi-based Topline Securities brokerage house, told Arab News. 

“Petrol and diesel prices were reduced by 7-12 percent in May 2023. This will also ease inflation in the coming months, unless any major pressure is seen on rupee.”


Innovative ambulance service in Pakistan’s capital offers hope, care for mental health patients

Updated 23 min 1 sec ago
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Innovative ambulance service in Pakistan’s capital offers hope, care for mental health patients

  • According to World Health Organization, 24 million people in the country are affected by mental health issues
  • Embrace ambulance service has been exclusively focusing on mental health patients since its initiation in 2021

ISLAMABAD: Located just 30 minutes from Islamabad in the picturesque village of Pind Begwal, a unique ambulance center focuses exclusively on mental health patients in and around Pakistan’s federal capital.
The service, named Embrace, was initiated as a pilot project by public health professional Abdullah bin Abbas during the COVID-19 pandemic before it was officially launched last month.
The center addresses Pakistan’s significant mental health challenges, where about 24 million people are affected according to 2023 World Health Organization estimates.
It provides specialized transportation for patients, many of whom display behaviors that are challenging for families to manage, such as isolation or suicidal tendencies.
Operating three ambulances, the service focuses on discreetly moving patients to receive appropriate care, thereby helping to mitigate the stigma associated with mental health issues in the country.
“Since it’s official launch, we have received an amazing response from the public and we have handled 60 to 70 cases just within the past month and this volume is increasing regularly,” Abbas, the center’s chief executive officer, told Arab News on Tuesday.
The concept of mental health ambulances was first tested in Sweden to assist those experiencing psychological distress. This innovative approach allowed for basic help and services to be delivered directly to individuals’ doorsteps, providing timely treatment and transportation to rehabilitation facilities when needed.
Abbas noted that even in major Pakistani cities, the mental health care infrastructure was inadequate. He pointed out this also prompted him to launch the ambulance service after securing initial funding from Columbia University.
“There are a lot of rehab centers and clinics that are being operated in some very unethical environments,” he continued. “So, what we wanted to do was provide a service to the general public which is accessible, affordable and operated in a professional and ethical manner.”
He noted that Embrace had established standards in line with international protocols, under the guidance of an oversight committee that included psychiatrists and psychologists.
He also pointed out that the transport vehicles were designed to be discreet, without any markings to indicate they were serving mental health patients.
“We have a total staff of 15 people that includes both men and women, and they have been extensively trained in psychological first aid, compassionate communication, and how to handle psychiatric patients,” he said, adding that the Embrace staff had interned at various psychiatric clinics and learned how to respond to emergencies.
To make the venture financially viable, the ambulance facility charges for its services based on the patient’s financial condition while keeping it free for deserving patients.
Zainab Nosheen, a first responder nurse at the center, said whenever a call for the ambulance service comes in, the team investigates whether the person needs to be shifted to a health care facility.
“If there is a female patient, then female staff go and help the patient shift to the desired hospital or clinic,” she said, adding the first step was a conversation with the family about the patient’s condition.
“Then, our first attempt is to make the patient agree to go to the doctor with us,” she added. “For that, we have different strategies which vary from patient to patient. At times, our communication takes 30 to 40 minutes to convince the patient to come with us.”
Arshad Mahmood, another first responder, said he had transported 25 patients using the Embrace ambulance service in the last two years, noting that some patients exhibited violent and threatening behavior.
“To deal with such situations, we have also taken self-defense training,” he told Arab News.
“Once we shift the patient into the ambulance, then the attendant decides which hospital to take them to for treatment, and we act accordingly,” he added.


Pakistan to launch ‘historic’ lunar mission aboard China’s Chang’e 6 on May 3

Updated 01 May 2024
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Pakistan to launch ‘historic’ lunar mission aboard China’s Chang’e 6 on May 3

  • Pakistan’s Institute of Space Technology has built ICUBE-Q in collaboration with Shanghai University and SUPARCO
  • The student-built payload carries two optical cameras to image lunar surface and will be part of China’s mission to the Moon

ISLAMABAD: Pakistan is scheduled to send its “historic” lunar mission (ICUBE-Q) on board China’s Chang’e6 which is scheduled to be launched on May 3, reported the state-owned Associated Press of Pakistan (APP) news agency on Tuesday.
ICUBE-Q has been designed and developed by the Institute of Space Technology in collaboration with China’s Shanghai University and Pakistan’s national space agency SUPARCO.
“ICUBE-Q orbiter carries two optical cameras to image the lunar surface,” the APP reported. “Following successful qualification and testing, ICUBE-Q has now been integrated with the Chang’e 6 mission.”
China is set to launch a first ever attempt to collect samples from the far side of the Moon.
The Chinese mission aims to grab samples containing material ejected from the lunar mantle and thus provide insight into the history of the Moon, Earth and Solar System.
According to the website of the Institute of Space Technology, China’s national space agency allowed Asia Pacific Space Cooperation Organization member states to send student-built payload to the Moon with its mission.
The Pakistani institution built a device that was selected for the purpose after rigorous evaluation.


At least 143 killed in Pakistan’s unusually heavy April rains

Updated 01 May 2024
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At least 143 killed in Pakistan’s unusually heavy April rains

  • Pakistan has become vulnerable to unpredictable weather, often-destructive monsoon rains that usually arrive in July
  • The largest death toll for April was in Khyber Pakhtunkhwa province, where 83 people died, including 38 children

ISLAMABAD: At least 143 people died in Pakistan from lightning strikes and other storm-related incidents in April, with the country receiving more than twice as much rain as usual for the month, officials said Tuesday.
April brought flash floods, landslides and inclement weather that caused houses to collapse in some areas and destroyed crops in others.
Pakistan saw a rainfall “increase of 164 percent above the normal levels in April, which is very unusual,” said Zaheer Ahmad Babar, spokesperson for the Pakistan Meteorological Department.
“We’ve observed these erratic weather patterns as a direct result of climate change,” he told AFP.
Pakistan is increasingly vulnerable to unpredictable weather, as well as often-destructive monsoon rains that usually arrive in July.
The largest death toll for April was in northwestern Khyber Pakhtunkhwa, where 83 people died, including 38 children, and where more than 3,500 homes have been damaged.
“The fatalities resulted from roof collapse and landslide incidents,” Anwar Shahzad, spokesman for the province’s disaster management authority, told AFP on Tuesday.
In some northern parts of Punjab, the country’s most populous province, harvests of wheat, a staple food, were spoiled by hailstorms.
Environmental expert Maryam Shabbir Abbasi told AFP that overall weather patterns had shifted by “about a month and a half, and we should shift our calendars for the agriculture sector accordingly to avoid damages caused by unprecedented rainfall.”
Officials earlier this month said several people, including farmers harvesting wheat, were killed by lightning in Punjab, and that a total of 21 people were killed in different rain-related incidents.
Another 21 deaths were reported in Balochistan province in April, including seven people who were struck by lightning, with rain disrupting life in some districts and causing school closures.
In parts of Azad Kashmir, 14 people were killed, and at least four were killed in road accidents linked to floods in southern Sindh province.
In the summer of 2022, a third of Pakistan was submerged by unprecedented monsoon rains that displaced millions of people and cost the country $30 billion in damages and economic losses, according to a World Bank estimate.
As several parts of the country were battered by heavy rains this month, Karachi, the largest city, experienced its hottest day of the year on Sunday, with temperatures soaring to 37 degrees Celsius (99 degrees Fahrenheit).


Pakistan reduces petrol and diesel prices amid favorable global energy market conditions

Updated 01 May 2024
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Pakistan reduces petrol and diesel prices amid favorable global energy market conditions

  • The government has announced to bring down the petrol and diesel prices by Rs5.45 and Rs8.42 respectively
  • Rising fuel cost in Pakistan led to inflationary pressure in economy, though things are said to be improving

ISLAMABAD: The government announced a reduction in the petrol price in Pakistan by Rs5.45 per liter on Tuesday night, bringing the overall rate down to Rs288.49 for the next 15 days following a recommendation of the Oil and Gas Regulatory Authority (OGRA).
Pakistan typically adjusts petroleum prices on a fortnightly basis, taking into account fluctuations in the international energy market and the rupee-dollar exchange rate.
According to an official notification, the diesel price has also seen a downward revision of Rs8.42 per liter, setting it at Rs281.96.
“The prices of Petroleum products have seen a decreasing trend in the international market during the last fortnight,” the notification announced. “The Oil & Gas Regulatory Authority (OGRA) has worked out the consumer prices, based on the price variations in the international market. The prices of Motor Spirit [petrol] & HSD [high-speed diesel] for the next fortnight, starting from 1st May, 2024, are accordingly being lowered.”
Earlier, the government increased the petrol and diesel prices by Rs4.5 and Rs8.1 per liter, respectively, on April 15.
Pakistan significantly increased fuel prices after securing a short-term, $3 billion loan from the International Monetary Fund (IMF) last year.
The rising rates also led to spiraling inflation in the country, though the government started offering relief to the people by gradually bringing down the petroleum prices.
Pakistan is in the process of securing yet another IMF loan which is expected to be bigger in terms of size and duration.


Rana Sanaullah, another Nawaz Sharif loyalist, appointed adviser to Pakistan PM

Updated 01 May 2024
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Rana Sanaullah, another Nawaz Sharif loyalist, appointed adviser to Pakistan PM

  • Sanaullah’s appointment comes two days after foreign minister Ishaq Dar was named deputy prime minister
  • Analysts believe the appointments indicate Nawaz Sharif is trying to assert indirect control over the government

ISLAMABAD: President Asif Ali Zardari on Tuesday appointed Rana Sanaullah adviser to Prime Minister Shehbaz Sharif, according to a post on the Pakistan president’s official account on platform X.
Sanaullah is considered a close aide of PM Sharif’s elder brother, Nawaz Sharif, who is also a three-time former prime minister.
Sanaullah has previously served as the federal interior minister and provincial law minister for Pakistan’s most populous Punjab province.
“President Asif Ali Zardari has approved the appointment of Rana Sanaullah Khan as Adviser to the Prime Minister on Political and Public Affairs,” read the post on President Zardari’s official social media account.
“The President approved the appointment of Rana Sanaullah Khan on the advice of the Prime Minister under Article 93 (a) of the Constitution.”
Sanaullah’s appointment comes two days after Foreign Minister Ishaq Dar was named the country’s deputy prime minister. Dar, a 73-year-old chartered accountant, is another close Nawaz Sharif ally.
The elder Sharif, who returned to Pakistan in October 2023 after years of self-exile, was widely seen as the favorite candidate for the prime minister’s office ahead of the February 8 national polls, and was believed to be backed by the country’s powerful army.
However, the three-time former prime minister decided against taking the PM’s office after the elections failed to produce a clear winner, leading to speculation that his role in the country’s politics had come to an end.
Analysts widely believe that the recent appointments of Dar and Sanaullah indicate Nawaz Sharif is attempting to assert control over the government through indirect means.