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.”


Pakistan calls for stronger agricultural and food security cooperation with Egypt

Updated 5 sec ago
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Pakistan calls for stronger agricultural and food security cooperation with Egypt

  • Pakistan’s food security minister praises Egypt for arid farming and climate-smart technologies
  • He also acknowledges Egypt’s support on global issues and cooperation at multilateral forums

KARACHI: Pakistan on Thursday called for enhanced collaboration with Egypt in agricultural science, biotechnology and food security, citing Egyptian expertise in climate-smart technologies and arid farming during a ceremony held in Islamabad.

Federal Minister for National Food Security and Research Rana Tanveer Hussain represented Prime Minister Shehbaz Sharif at the event marking Egypt’s National Day, which brought together diplomats, government officials and members of the business community.

“Referring to Egypt’s impressive progress in agricultural development, the Minister called for enhanced collaboration in areas such as agricultural science, seed development, arid farming, capacity building, drip irrigation and climate-smart technologies, where Egypt has notable expertise,” said an official statement issued after the ceremony.

“Hussain emphasized the importance of joint initiatives in food security, biotechnology and sustainable agricultural practices,” it continued.

“He said that Pakistan and Egypt’s shared experience in managing water-scarce environments offers an opportunity for meaningful partnerships between research institutions and private sectors in both nations.”

The minister acknowledged Egypt’s support to Pakistan on regional and international matters and praised the ongoing cooperation at multilateral forums such as the Organization of Islamic Cooperation (OIC) and the United Nations.

Noting the revival of the Pakistan–Egypt Joint Ministerial Commission (JMC), Hussain said both governments are working to finalize new bilateral agreements in trade, agriculture, higher education and cultural exchange.

Egypt’s agricultural sector is on an upward trajectory and has witnessed a strong export performance, though environmental constraints remain a concern.


Pakistan eyes ‘multibillion-dollar benefits’ as it plans direct ferry link to Oman

Updated 04 July 2025
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Pakistan eyes ‘multibillion-dollar benefits’ as it plans direct ferry link to Oman

  • Pakistani minister says Oman can boost regional ties via maritime corridor to South and Central Asia
  • He proposes boosting bilateral trade through improved port infrastructure and closer cooperation

KARACHI: Pakistan and Oman have agreed to deepen maritime cooperation, including launching a direct ferry service between Gwadar and the Sultanate, in a move that Islamabad says could unlock billions of dollars in trade, investment and transit revenue.

The development follows a high-level meeting on Thursday between Pakistan’s Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry and Oman’s Ambassador Fahad bin Sulaiman bin Khalaf Al Kharusi.

Both officials emphasized the need to boost maritime connectivity and capitalize on their long-standing economic and cultural ties.

“Minister Junaid Chaudhry underscored the economic potential of launching a direct ferry service from Gwadar to Oman, projecting multi-billion-dollar benefits in trade expansion, investment inflows and transit revenue,” said an official statement issued after the meeting.

“He stated that Pakistan stands to earn an estimated $10–15 billion annually through Gwadar’s maritime operations, while Oman could establish a maritime corridor to South and Central Asia, significantly enhancing its regional connectivity,” it added.

A view of newly constructed highway connecting to Gwadar port in the coastal city of Gwadar, Balochistan, Pakistan on January 14, 2025. (AP/File)

Earlier this week, the government announced its plan to launch a ferry service connecting Gwadar Port, a centerpiece of the China-Pakistan Economic Corridor (CPEC), to the Gulf Cooperation Council countries, aiming to strengthen regional ties, improve passenger movement and access new markets across the Middle East.

Pakistan’s minister of maritime affairs said his country’s exports to Oman stood at $224 million in 2024, and stressed the need to scale this up through improved port infrastructure and bilateral collaboration.

As part of long-term cooperation, he also offered maritime training and education opportunities for Omani students at the Pakistan Marine Academy.

The Omani ambassador welcomed the proposals and emphasized the importance of expanding cultural and commercial ties.

He acknowledged the positive contributions of the Pakistani diaspora to Oman’s development and noted that Urdu was widely understood in his country, reflecting strong social bonds between the two nations.


Tensions rise for Imran Khan’s party as Punjab speaker signals opposition disqualifications

Updated 03 July 2025
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Tensions rise for Imran Khan’s party as Punjab speaker signals opposition disqualifications

  • Malik Ahmad Khan says lawmakers violating constitution have no place in the provincial assembly
  • KP Governor Faisal Kundi has also hinted at a no-trust move against PTI-backed CM Gandapur

ISLAMABAD: Political temperatures rose on Thursday as Speaker of the Punjab Assembly, Malik Ahmad Khan, suggested opposition lawmakers backed by Pakistan’s jailed former Prime Minister Imran Khan could be disqualified from the provincial legislature.

Earlier, the speaker had suspended the membership of 26 lawmakers supported by the former premier’s Pakistan Tehreek-e-Insaf (PTI) party for 15 sessions following chaotic scenes during Chief Minister Maryam Nawaz’s speech during budget proceedings last month.

However, the issue of their disqualification gained traction a day after PTI announced a nationwide protest movement against the government in response to a Supreme Court ruling that denied the party reserved seats for women and minorities in national and provincial legislatures.

“Lawmakers violating the Constitution have no right to remain part of the provincial assembly,” the speaker told reporters on Thursday.

He maintained creating disruption in an assembly was wrong for any political party.

“I will fight this case to uphold the Constitution,” he continued. “I have exercised restraint for over a year and a half as speaker … I now have to fulfill my responsibilities as speaker.”

Last month, Pakistan’s top court upheld a verdict by the Peshawar High Court, ruling that the PTI was not entitled to reserved seats for women and minorities in national or provincial assemblies. The Supreme Court’s constitutional bench ruled that since PTI candidates had contested the February 8 general elections as independents after losing their electoral symbol, they could not claim reserved seats under proportional representation.

The fallout from the Supreme Court verdict has also rattled the PTI’s traditional power base in Khyber Pakhtunkhwa (KP) province where the party managed to form its government.

KP Governor Faisal Karim Kundi, who represents the federal government, has warned that a no-confidence motion could be tabled against PTI-backed Chief Minister Ali Amin Gandapur, a close aide of the jailed former prime minister.

Gandapur, however, has dismissed concerns about his government’s stability, saying there is no constitutional way to remove him from office.


European climbers complete rare alpine-style ascent of Nanga Parbat’s deadly Rupal face

Updated 03 July 2025
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European climbers complete rare alpine-style ascent of Nanga Parbat’s deadly Rupal face

  • German climber David Göttler paraglided from near the summit in a daring solo descent
  • Nanga Parbat is infamous for its high fatality rate, earning it the nickname ‘Killer Mountain’

ISLAMABAD: Three European climbers achieved a rare feat on one of the world’s most dangerous peaks, scaling the treacherous Rupal face of Nanga Parbat in alpine style, with one of them paragliding down from near the summit in a daring solo descent earlier this week.

German climber David Göttler was joined by French mountaineers Tiphaine Duperier and Boris Langenstein for the climb via the Schell route, a steep and rarely successful line up the mountain’s massive southern wall. The Rupal face, rising nearly 4,600 meters from base to summit, is considered the world’s highest mountain face and among the most technically demanding.

“Sometimes you need to be patient … It’s taken five attempts, but now that I’ve achieved it, I know it’s all been worthwhile,” Göttler wrote in a social media post on Tuesday, describing his 12-year pursuit of the route.

He said summiting with his teammates in alpine style was “incredible,” and added that being able to fly down from around 7,700 meters to base camp in the same day took his joy “to the next level.”

Unlike traditional expedition climbing, alpine style involves climbing in a single push without establishing fixed ropes or pre-stocked camps, requiring climbers to carry all their gear. The approach demands speed, efficiency and a high degree of skill, especially at high altitude.

“It’s been a long time since an expedition has successfully summited from the Rupal side,” Naiknam Karim, CEO of Adventure Tours Pakistan, which facilitated the expedition’s logistics, told Arab News over the phone. “Normally, people climb from the Diamir face.”

“What makes this climb special is that they did it in alpine style ,” he continued. “What’s even more remarkable is that Göttler paraglided down from the summit. So, that’s his special achievement.”

Nanga Parbat, the world’s ninth-highest peak at 8,126 meters, is infamous for its difficulty and high fatality rate, earning it the nickname “Killer Mountain.”

Over 100 climbers and porters have died on its slopes, with the Rupal face considered particularly unforgiving due to avalanche risk and exposure to extreme weather.


Pakistan pushes ahead with agri bank privatization under IMF-backed reform plan

Updated 03 July 2025
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Pakistan pushes ahead with agri bank privatization under IMF-backed reform plan

  • The Privatization Commission Board appoints financial advisers for the sale of Zarai Taraqiati Bank
  • An official statement mentions ZTBL among the priority transactions in the privatization pipeline

KARACHI: The government on Thursday appointed a consortium of financial advisers for the sale of Zarai Taraqiati Bank Limited (ZTBL), a state-owned agricultural lender, according to an official statement.

The decision, made during a meeting of the Privatization Commission (PC) Board chaired by Muhammad Ali, Adviser to the Prime Minister, signals the government’s intent to fast-track key transactions under its broader economic reform program.

The board approved the selection of a consortium led by Next Capital Limited, which ranked highest among six qualified bidders.

“ZTBL is among the priority transactions in the current privatization pipeline. The appointment of a top-tier consortium of FAs [financial advisers] reflects the government’s strong commitment to executing the process in a professional, transparent and timely manner,” the Privatization Commission said in a statement.

Pakistan’s privatization program, long encouraged by the International Monetary Fund (IMF) under various loan arrangements, is aimed at reducing fiscal losses from poorly performing state-owned enterprises (SOEs), improving governance and boosting private sector participation.

The IMF has repeatedly called for structural reforms, including divestment from commercial entities, to ease pressure on public finances and strengthen the country’s economic outlook.

Alongside the appointment, the PC Board also approved the formation of a Negotiation Committee to finalize the Financial Advisory Services Agreement (FASA) with the selected consortium.

Other shortlisted bidders included major consortiums led by Arif Habib Limited, A.F. Ferguson, AKD Securities, Bridge Factor and JS Bank.

ZTBL provides agricultural credit and rural banking services across Pakistan.

Its privatization is seen as part of a broader effort to reform the financial sector and reduce the state’s commercial footprint.