Inflation is pushing an ever increasing number below the poverty line (currently estimated at 40 percent comparable to Sub-Sahara Africa) and the critical question that should, not likely to be, but should be uppermost in the minds of the formulators and approvers of the budget 2024-25, is to determine anti-inflationary measures that no donor – multilateral or bilateral – will challenge and proceed to implement these measures faithfully.
The two key words are measures that would be supported by the donors, particularly the international Monetary Fund (IMF) given that negotiations for the next programme are underway; and faithful implementation of these measures as our administrations, barring none, typically overstate the budget allocation for development and by year end have ruthlessly slashed it to bring some semblance of sustainability to the budget deficit which, by itself, is a highly inflationary policy – a practice that is sourced to resistance to curtail current expenditure that reflects elite capture of the country’s scarce resources.
Inflation (Consumer Price Index) in double digits has been a feature of the Pakistan economy since May 2022 – peaking at a high of 38 percent in May last year and as per the Pakistan Bureau of Statistics (PBS) declining each month since January 2024 – from 28.3 percent to 23.1 percent in February, to 20.7 percent in March to 17.3 percent in April to 11.8 percent in May. The average July-May 2024 is a high of 24.52 percent against 29.16 percent in the comparable period of the year........