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Pakistan headline inflation jumps to 24.5% on the back of food price hikes

A man shops for grocery items at a store in Peshawar, Pakistan on April 27, 2018. (REUTERS/File)
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Updated 02 January 2023
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Pakistan headline inflation jumps to 24.5% on the back of food price hikes

  • Persistently high inflation has put severe strain on Pakistan’s economy already reeling from multiple woes 
  • Experts say inflation may go as high as 27% once government implements IMF conditions by raising energy prices  
Updated 02 January 2023
KHURSHID AHMED   

ISLAMABAD: Pakistan's annual inflation, measured by the consumer price index (CPI), rose to 24.5 percent in December on a year-on-year basis, the country’s statistics bureau said on Monday, with experts saying it could go further up once the country receives the much-awaited loan tranche from the International Monetary Fund (IMF). 

Persistently high inflation has put a severe strain on the South Asian economy, already reeling from a balance-of-payment crisis, dwindling forex reserves and currency depreciation.  

On Monday, the Pakistan Bureau of Statistics (PBS) said in a statement that the overall prices were up 0.5 percent in December on a month-on-month basis.  

“CPI inflation (general) increased to 24.5% on a year-on-year basis in Dec. 2022 as compared to an increase of 23.8% in the previous month and 12.3% in Dec. 2021”, the bureau said in the statement. 

“On [a] month-on-month basis, it increased to 0.5% in Dec. 2022 as compared to an increase of 0.8% in the previous month and with no change in Dec. 2021.” 

With the foreign exchange reserves plummeting to $5.8 billion in December — barely enough for a month of imports — the South Asian country faces the specter of a default on its international financial obligations and desperately awaits external financing.  

An IMF review of Pakistan's $7 billion loan program, secured in 2019, is pending since September. Once approved, the global money lender will provide over $1.1 billion to the cash-strapped nation.  

Financial experts believe inflation will further increase once the country receives another tranche from the IMF and implements the lender’s conditions. 

“The food price hike of 35.5% played a major contribution to the overall inflation during the month of December [and] inflation has been witnessed across the board,” Tahir Abbas, a research head at the Karachi-based Arif Habib Limited brokerage firm, told Arab News.  

“The inflation may increase to around 27% if the government implements IMF conditions by raising electricity and gas tariff, and determines market-based currency exchange rate.” 

Abbas said the country needed to take these measures for the continuity of the IMF program and had “no other option in hand.” 

Pakistan's Ayla Majid becomes first South Asian and Muslim to be elected ACCA president 

Updated 8 sec ago
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Pakistan's Ayla Majid becomes first South Asian and Muslim to be elected ACCA president 

  • Ayla Majid is the CEO of a firm that advises on decarbonization, sustainability and energy transition 
  • She will lead 252,500 members and 526,000 future members of ACCA across 180 countries during her tenure
Updated 8 sec ago
Hasaan Ali Khan

ISLAMABAD: Ayla Majid, the chief executive officer of a firm that advises on decarbonization, sustainability and energy transition, made history this week after becoming the first South Asian and Muslim to get elected as president of the global accountancy body ACCA (Association of Chartered Certified Accountants). 
Majid will lead more than 252,500 members and 526,000 future members of ACCA across 180 countries during her year-long term of office, ACCA wrote on its website on Friday. 
Currently the founder and CEO of Planetive Middle East and Planetive Pakistan, Majid has over 20 years of experience in energy, transaction advisory, mergers and acquisitions, investments and corporate governance. 
She holds a Master of Business Administration degree from the Lahore University of Management Sciences (LUMS) and a Bachelor of Law degree from the University of London.
"It's an honor and a deeply meaningful moment, not just for me but for so many who see themselves in this achievement," Majid told Arab News via email on Friday. 
"Breaking these barriers reflects the values of inclusion and diversity that ACCA embodies," she added. "Personally, it’s a testament to the power of resilience and the importance of representation."
Majid said the accounting and finance profession globally is evolving rapidly in response to the demands of a changing world, explaining that issues such as sustainability, digital transformation and evolving regulatory landscapes are reshaping the skills accountants need.
"Additionally, we must ensure the profession remains relevant in addressing societal challenges such as climate change and economic inequality," she said. 
"ACCA can play a pivotal role by continuously enhancing its qualifications to include skills in sustainability reporting, digital transformation, and strategic leadership."
Majid called for global collaboration and championing inclusion, saying that through such initiatives, ACCA can prepare its members to not just respond to challenges but "lead with purpose and impact."
"My vision for ACCA is to continue being a catalyst for positive change, working alongside diverse group of partners and collaborate more on global agendas," Majid said. 
"By strengthening our advocacy on global issues like climate action and economic resilience, we can shape a better future," she added.

Topics: Ayla Majid ACCA ACCA President

Pakistan keeps prices of petroleum products unchanged till Nov. 30

Updated 39 min 7 sec ago
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Pakistan keeps prices of petroleum products unchanged till Nov. 30

  • Prices of high speed diesel, petrol to remain unchanged at Rs255.14 per liter and Rs248.38 per liter respectively
  • Pakistan revises prices of petroleum products every fortnight based on variations of prices at international market 
Updated 39 min 7 sec ago
Arab News Pakistan

ISLAMABAD: Pakistan’s government announced its decision this week to keep prices of petroleum products unchanged till the next fortnight on Nov. 30, state-run media reported. 
Pakistan revises petroleum prices every fortnight. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers in Pakistan while any increase in the price of diesel is considered highly inflationary as it is mostly used to power heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.
“The government has announced on Friday that prices of the petroleum products would remain unchanged during the next fortnight from November 16th to 30th 2024,” the state-run Associated Press of Pakistan (APP) reported on Friday. 
As per the latest notification, the price of high speed diesel (HSD) remains unchanged at Rs 255.14 per liter while the price of petrol also remains unchanged at Rs 248.38 per liter. 
“The Oil and Gas Regulatory Authority has worked out the prices of petroleum products for the next fortnight based on the price trends in the international market during the last two weeks,” the APP said. 
On Oct. 31, Pakistani authorities increased the price of petrol from Rs247.03 per liter to Rs248.38 per liter, saying it decided to do so “based on the price variation in the international market.”

Pakistan rejects sole $36 million bid for national flag carrier

Updated 16 November 2024
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Pakistan rejects sole $36 million bid for national flag carrier

  • Blue World City, a real estate development company, last month bid $36 million for state-owned PIA airline
  • Pakistan seeks to offload 51-100% stake in national airline to reform state-owned enterprises as per IMF deal
Updated 16 November 2024
Shahjahan Khurram

ISLAMABAD: Pakistan’s Cabinet Committee on Privatization (CCOP) this week rejected a $36 million bid from a real estate development company to acquire 60 percent stakes in the government-owned Pakistan International Airlines (PIA), state-run media reported. 
Pakistan’s process to privatize the PIA encountered difficulties last month when its final bidding round for the national flag carrier attracted just one bid of Rs10 billion ($36 million) for a 60 percent stake in the airline. The bid was made by real estate development company Blue World City. 
The cash-strapped country is looking to offload a 51-100 percent stake in the debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund (IMF) program. 
A meeting of the CCOP chaired by Deputy Prime Minister Ishaq Dar on Friday discussed Blue World City’s bid and the Privatization Commission’s (PC) suggestion to reject it. 
“The Cabinet Committee on Privatization (CCOP) rejected the bid of Rs10 billion submitted by the Blue World City for the divestment of 60 percent shares of the Pakistan International Airlines, accepting the recommendations of the Privatization Commission Board,” the state-run Associated Press of Pakistan (APP) reported on Friday.
The CCOP reiterated the government’s resolve to divest the national flag carrier through privatization or government-to-government (G2G) mode. 
“The body noted with satisfaction the assessment of the aviation division on healthy PIACL’s finances,” APP said. 
Pakistan’s government disclosed last year that it had signed a contract with the New York City administration to resume business activities at the Roosevelt Hotel, which is owned by the PIA. 
The hotel was closed by Pakistani authorities in October 2020 during the coronavirus pandemic, as the country’s economy weakened and the aviation sector faced significant losses. However, the facility accumulated liabilities of around $25 million in taxes and other overheads.
“The committee also constituted a committee under the convenorship of the minister of state for finance to evaluate possible transaction options for the privatization of Roosevelt Hotel and modes to be adopted in the light of available legal provisions,” APP said. 
Pakistan’s Khyber Pakhtunkhwa (KP) province and a business group in Canada led by a Pakistani expat have both expressed their interest in acquiring the national flag carrier. 
The government had pre-qualified six groups for PIA’s privatization process in June, but only real-estate development company Blue World City participated in the bidding process last month, placing a bid that was below the government-set minimum price of Rs85 billion ($304 million). 
The disposal of PIA is a step former governments have steered away from, as it has been highly unpopular given the number of layoffs that would likely result from it.
Other concerns raised by potential bidders for the PIA stake included inconsistent government communication, unattractive terms and taxes on the sector, and the flag carrier’s legacy issues and reputation.

Topics: PIA privatization Pakistan International Airlines (PIA)

IMF urges Pakistan to digitalize budget preparation for better fiscal monitoring

Updated 16 November 2024
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IMF urges Pakistan to digitalize budget preparation for better fiscal monitoring

  • The international lender says budget processes still involve manual and paper-based steps despite reforms
  • IMF has pointed out Pakistan’s interest payments absorb 60 percent of budgeted revenue due to public debt
Updated 16 November 2024
Aamir Saeed

ISLAMABAD: The International Monetary Fund (IMF) has suggested Pakistan to digitalize its budget preparation and execution processes to improve fiscal monitoring and reporting to overcome deviations from the planned budgets.
In report a technical assistance report to improve budget practice brought out this week, the international lender said Pakistan needed to take strong control over the budget in the coming years.
The report came as an IMF delegation led by Pakistan mission chief, Nathan Porter, completed a five-day trip to the country in which it discussed the performance of a $7 billion loan program approved in September. The IMF has said Porter’s visit is not part of the first review of the loan program, which is not scheduled to take place before the first quarter of 2025.
“An examination of Pakistan’s recent budgetary outcomes reveals substantial deviations from planned budgets,” the lender said in the report. “While these discrepancies are partially due to an unstable external environment and political uncertainties, the establishment of stronger fiscal institutions can help deliver a more credible budget, tighten its execution, and prevent policy slippages.”
The IMF pointed out that despite several reforms, the budget processes still involved significant manual and paper-based steps.
“Fully digitalized processes are yet to be prepared and implemented in the Financial Accounting and Budgeting System,” it said in the report. “The Finance Division has designed a data warehouse to store fiscal data and made available a set of dashboards for use by stakeholders, but this is hampered by the lack of timely data provided by some key entities. As a result, fiscal reporting is not yet comprehensive and timely.”
It added that regulatory framework and fiscal data governance practices, including data exchange, did not fully address these challenges.
The IMF also noted Pakistan’s public debt had increased considerably, and interest payments were now absorbing 60 percent of budgeted revenue.
However, it recognized that multiple external shocks and the unprecedented floods in 2022 buffeted the economy and the government’s fiscal position.
“These shocks have been compounded by policy slippages including unbudgeted subsidies, and delays in implementing revenue measures,” it continued, adding the authorities now had the difficult task of converting a primary deficit of 1.3 percent of GDP for FY23 into a primary surplus for FY24. It also emphasized continued fiscal restraint, while preserving essential social and development spending.
The international lender suggested the finance division to require line ministries to prepare their budget submissions within a binding budget ceiling and explain any request for additional resources.
“Consider a reorganization of the Finance Division to reduce fragmentation and improve effective decision-making,” the reported suggested. “Support the reorganization with a functional review of the Division’s structure and staffing.”

Topics: Pakistan IMF Talks Pakistan budget Pakistan IMF IMF bailout measures

WHO, Pakistani officials cite ‘immunity gap’ as key factor behind surge in polio cases

Updated 16 November 2024
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WHO, Pakistani officials cite ‘immunity gap’ as key factor behind surge in polio cases

  • WHO official says resurgence developed over time due to ‘compromised campaign quality’
  • Pakistan has reported 49 cases this year, mostly from Balochistan and Khyber Pakhtunkhwa
Updated 16 November 2024
Aamir Saeed REHMAT MEHSUD & SAADULLAH AKHTER

ISLAMABAD, PESHAWAR, KARACHI: The World Health Organization (WHO) and Pakistani officials have identified “immunity gap” as a key factor behind the resurgence of polio in the country, as Pakistan on Friday reported its 49th case this year from the southwestern Balochistan province.
Polio is a highly contagious disease that can cause irreversible paralysis, particularly in young children, and remains incurable, posing a persistent threat as long as the virus is not eradicated.
Most cases in Pakistan have emerged from the conflict-hit Khyber Pakhtunkhwa and Balochistan provinces. Along with neighboring Afghanistan, Pakistan remains one of the last two countries in the world where polio is endemic. After significant progress in reducing cases, Pakistan has seen a resurgence since late 2018, underscoring the fragility of earlier gains.
Health officials explain that an “immunity gap” occurs when a large segment of the population lacks sufficient resistance to the poliovirus, leaving communities vulnerable to infection and outbreaks despite immunization efforts.
“The ongoing transmission and resurgence of the poliovirus was largely attributed to a widespread immunity gap that has developed over time,” WHO spokesperson Maryam Younas told Arab News.
She attributed this “to a compromised campaign quality because of security-related challenges, community resistance, boycotts and demands of local communities, suboptimal routine immunization coverage and internal displacement of mobile and migrant populations.”
Younas added high-quality vaccination campaigns were needed to bridge the immunity gap, highlighting that the WHO had organized back-to-back large-scale campaigns in September and October that vaccinated around 45 million children.
“These will follow another campaign in December to effectively plug the immunity gap,” she said. “The mobile and migrant populations were redefined and mapped with revitalized focus on their vaccination.”
Health officials from the restive Khyber Pakhtunkhwa and Balochistan provinces also echoed the same concerns, saying that immunity gaps played a major role in the resurgence of poliovirus.
KP’s Special Health Secretary Abdul Basit said the provincial government was undertaking efforts to “plug remaining immunity gaps” from the region by ensuring timely immunization of children.
A tribal elder from South Waziristan, Malik Anwar Wazir, told Arab News the increasing number of polio cases raised question about the government’s polio eradication efforts. He termed the decades of infighting and unrest in parts of KP and tribal areas responsible for “inconsistent health care initiatives.”
“Mass exodus or displacement of families because of militancy hinder vaccination drives,” he added. “Most of the families in the tribal belt and parts of KP move for safer areas due to constant war, which creates problems for full immunization dose.”
Dr. Aftab Kakar, a health official in Balochistan, said international donors funding Pakistan’s polio eradication program had expressed concerns and given the authorities in the province new targets to prevent poliovirus transmission by June 2025.
“After being declared a polio-free province for almost years, we received the first transmission of poliovirus from Kandahar [Afghanistan] in September 2023,” he said. “If our children were immunized and well nourished, the virus would not have survived and spread all over the province.”
This year, 24 polio cases have been reported in Balochistan, 13 in Sindh, 10 in Khyber Pakhtunkhwa and one each in Punjab and the federal capital, Islamabad. In the early 1990s, Pakistan recorded approximately 20,000 cases annually, but the number dropped to eight in 2018, six in 2023 and only one in 2021.
Pakistan’s polio eradication program, launched in 1994, has significantly reduced the number of cases over the years. However, the country continues to face major challenges, including militancy, with polio workers frequently targeted in attacks, particularly in the northwestern Khyber Pakhtunkhwa province.
The program has adapted to address climate disasters, such as floods, but continues to experience disruptions. Additionally, there are gaps in supplementary immunization activities, particularly in areas where the virus remains active.

Topics: Pakistan Polio Service

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