Wednesday August 17, 2022

Reform required

December 05, 2021

Since 2018, inflation has been growing worse. In November, it broke the record of the last 20 months, spiking to 11.5 percent. It is feared that December too will see an increase in prices of all items. There are a number of reasons for this inflation.

First, the prices of petrol and petroleum goods will remain the same till December 15, at least. Second, the government has been spending a lot on imports, and given that Pakistan has taken loans from the IMF and Saudi Arabia, one thinks that debt servicing for them will mean inflation will remain high in the coming year. Third, the disruptions in industries following the Covid-19 restrictions, have led to low productivity. Moreover, the current economic policies are not helping. The government needs to understand that growth without structural reforms is unsustainable.

Mir Afzal