Govt concedes inflation is the main challenge

ISLAMABAD: The government on Tuesday conceded that presently inflation is one of the main challenges and said the government is taking all possible measures to control it.

“Presently, inflation is one of the main challenges. However, the government is taking all possible measures to control it,” the Ministry of Finance stated in its monthly update report on the economy released on Tuesday.

It further stated that together with measures that ensure sufficient supply of goods, especially food-related production, it is expected that inflation will remain under control, whereas policy measures will contribute to better functioning markets. “Most importantly, although domestic economic activity is expected to recover, still the risk of pandemic attack persists if the SOPs (standard operating procedures) are not fully followed. Thus, Pakistan’s near-term economic prospects are promising subject to reducing uncertainty and restoring business confidence,” the report maintained.

Based on high frequency indicators, summarised in the MEI, economic growth is showing persistent recovery in Q1 FY-2021. In the absence of any adverse future shocks, the economy is on its way not only to rebound from the pandemic-related crisis, but also to record a reasonable growth rate for the full fiscal year.

Economic recovery has been observed from the start of the new fiscal year. Most importantly the decrease in number of coronavirus cases and the resumption of economic activities have contributed in dampening the negative impact of health crisis on the economy. Economic recovery was seen in Q1 FY-2021 and it is expected that this trend will continue but fears and risk factors are appearing due to the possible second wave of COVID-19.