Skip to main content

Pakistan saw highest inflation in the world during 2020: SBP

KARACHI: For Pakistan’s residents, fiscal year 2020 was the worst year as they witnessed highest inflation in the world forcing policy makers to increase interest rate.

“Pakistan witnessed highest inflation not only in comparison with the developed economies but also with emerging economies,” said the Inflation Monitor for April issued by the State Bank of Pakistan (SBP).

The SBP pushed up interest rates to cool down the inflationary pressure during the fiscal year but high rates proved counterproductive as they further increased inflation while the private sector stopped borrowing costly money hampering industrial growth and services.

January witnessed 12-year high inflation at 14.6 per cent. In response to the rising prices, the SBP rose the interest rates to 13.25pc.

However, with the emergence of coronavirus, the entire economic scenario was turned upside down as demand contraction lowered inflation forcing the SBP to cut down interest rates to 5.25pc within just three months.

The rate cut announcement came as inflation slowed down, falling to 8.2pc in May, much lower than the SBP projections for the month.

Detailed graphs accompanying the SBP’s Inflation Monitor show Pakistan’s inflation, when compared to developing economies like China, Thailand, India, Bangladesh and Sri Lanka, has fallen since the pandemic.

The July-May inflation for the current fiscal year slipped below to the State Bank’s earlier projection of 11pc to 10.94pc. The number is expected to drop further in June.

The government has slashed petroleum prices thrice during the two months, which drastically reduced the cost of production, transportation and finally reduced inflation.

In a televised interview, Zubair Motiwala, a known industrialist called on the government to bring down the interest rate lower than 5.25pc to boost economic activities.

Trade and industrial sectors, while demanding cuts to interest rate, also believe the economy needs additional injection of Rs3-4 trillion for full recovery.

However, with sharp economic slowdown, the revenue collection has also fallen short of target this year making further liquidity injection on such a large scale impossible for the government.

The SBP has provided relief amounting to hundreds of billions in the form of principal payments deferrals, debts rescheduling and lending on easier terms for industrial sector to avoid massive layoffs.

Published in Dawn, June 7th, 2020

Comments

Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed.
Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area”
For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number”
Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell you …

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…

A ‘European Silk Road’

publication_iconPhilipp HeimbergerMario Holznerand Artem Kochnevwiiw Research Report No. 430, August 2018 
43 pages including 10 Tables and 17 FiguresFREE DOWNLOAD
The German version can be found here.In this study we argue for a ‘Big Push’ in infrastructure investments in greater Europe. We propose the building of a European Silk Road, which connects the industrial centres in the west with the populous, but less developed regions in the east of the continent and thereby is meant to generate more growth and employment in the short term as well as in the medium and long term.After its completion, the European Silk Road would extend overland around 11,000 kilometres on a northern route from Lisbon to Uralsk on the Russian-Kazakh border and on a southern route from Milan to Volgograd and Baku. Central parts are the route from Lyon to Moscow in the north and from Milan to Constanţa in the south. The southern route would link Central Europe with the Black Sea area and the Caspian Sea litto…