Inflation in Pakistan hits historic high at 35.4% amid rising food and energy prices

A woman carries her child while she leaves with a free bag of flour from a government distribution point in Islamabad on April 1, 2023. (Photo courtesy: AFP)
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Updated 01 April 2023
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Inflation in Pakistan hits historic high at 35.4% amid rising food and energy prices

  • Food inflation has jumped to 47.1 percent in urban centers and 50.2 percent in rural areas of the country
  • Experts say interest rate hikes will further fuel inflation which is ‘crushing’ poor segments of the country

KARACHI: Inflation in Pakistan hit a record high of 35.4 percent in March, according to official data released on Saturday, as experts criticized the government’s wrong policy approach for the surging food and energy prices.

According to the data, inflation measured by the Consumer Price Index (CPI) increased to 35.4 percent on a year-on-year basis in March compared to 31.5 percent in February.

Food inflation in urban centers of the country jumped to 47.1 percent last month, while the figure stood at 41.9 percent in February. The price shock was even more severe for the country’s rural dwellers, where inflation reached 50.2 percent.

Key food items that registered price hikes included onion (257.62 percent), tea (105.19 percent), wheat (94.32 percent), eggs (83.60 percent), rice (82.41 percent), and wheat flour (69.98 percent). Additionally, there was also a surge in the rates of motor fuel (71.61 percent), gas (62.82 percent), electricity (31.73 percent), and transport services (30.56 percent).

Pakistani economists believe that food inflation, which was more painful for the poor, was under-reported by the government.

“The historic high inflation in Pakistan is taking a very heavy toll on the poor and even the lower and middle class,” Dr. Ikram Ul Haq, a senior Lahore-based economist, told Arab News. “The official food inflation figure of 47.1 percent seems understated as prices of daily food items during Ramadan have skyrocketed.”

Dr. Khaqan Najeeb, former advisor to the finance ministry, agreed, saying that food inflation was “crushing Pakistan’s low-income citizens” who were now spending more than half of their income to feed their families.

Najeeb identified low productivity of agriculture and the problem of regulated energy prices as the two key domestic drivers of inflation in the country.

“Fixing the fundamental constraint of low productivity is essential to stabilize inflation at a low level in the medium term,” he said. “Minimizing government control to let markets deliver goods and reducing fiscal deficit are also important to curtail inflation.”

Economists believe that inflation in Pakistan will further increase in the coming months while expecting an interest rate hike next week, which will further aggravate the sufferings of the marginalized.

Dr. Ashfaque Hassan Khan, a senior economist, said monetary policy mechanisms would not control spiraling inflation in Pakistan, as he criticized the government’s approach to dealing with the issue.

“We are administering the wrong medicine to treat inflation in Pakistan,” he told Arab News. “In our country, inflation is a supply-side phenomenon which is coupled with the government raising utility prices itself. However, we are treating the demand side through interest rate hikes.”

Khan maintained that tightening monetary policy was “not at all an instrument to control inflation in Pakistan” since the mechanism was meant for advanced economies where demand was responsible for greater inflationary pressure.

“We are not using the right instrument to treat inflation in the country,” he added.

Khan said when the central bank raised the interest rate by one percent, the decision led to an increase in inflation by 1.3 percent.

“The expected interest rate hike will further fuel inflation as it will curtail the availability of goods which will create supply-side shocks causing inflation,” he explained.

However, financial experts admitted there were hardly any concrete solutions available to policymakers to stem rising inflation, which they said was fast moving toward “hyperinflation.”

“The only viable solution to the economic crisis is a return to normalcy on the political front,” Haq, the Lahore-based economist, said. “This can then lead to a consensus on all out fundamental structural reforms.”


Pakistan says improving telecom services to increase IT exports, freelancers countrywide

Updated 4 sec ago
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Pakistan says improving telecom services to increase IT exports, freelancers countrywide

  • Prime Minister Shehbaz Sharif chairs Economic Advisory Council meeting in Islamabad
  • Rights activists, opposition accuse government of throttling Internet to suppress dissent 

ISLAMABAD: Prime Minister Shehbaz Sharif said on Wednesday that his government is undertaking efforts to improve telecommunication services and ensure Internet access in remote areas, his office said, adding that the move would increase IT exports and freelancers countywide. 
Pakistan’s government has been accused of stifling dissent by rights activists and the opposition with what they call restrictive measures. These include the blocking of social media platform X and the banning of virtual private networks (VPNs) last year. 
The government also confirmed its move to install a national firewall last year to regulate content online, saying its moves were aimed at regulating content online to make cyberspace safe for people. This caused Internet speeds to slow down considerably across the country, inviting criticism and anger from freelancers and IT experts. 
“We are working to increase the number of IT exports and freelancers in the country by improving telecommunication services and providing Internet access to remote areas,” Sharif was quoted as saying by the Prime Minister’s Office (PMO). 
The Pakistani premier was chairing a meeting of the Economic Advisory Council, an independent body that advises the prime minister on economic policies and affairs. 
Sharif praised his economic team for its efforts to ensure growth in the country, saying that his government is determined to work harder for sustainable economic development.
He said his economic team would take “full advantage” of Pakistan’s current potential for trade in the region and enable local industries to compete in the international market. 
“Development of industry, agriculture, IT, generating employment and increasing exports are among the top priorities of the government,” he said. 
Participants of the meeting said the country’s economy was heading toward economic stability, adding that Pakistan’s production had increased due to price stability, the PMO said. 
The PMO said that the meeting’s participants presented various suggestions to Sharif relating to various sectors.
“The prime minister directed relevant authorities to work with council members to formulate a comprehensive action plan regarding the suggestions,” the PMO said.


Pakistan wants to expel all Afghan refugees from the country, says Afghan embassy

Updated 19 February 2025
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Pakistan wants to expel all Afghan refugees from the country, says Afghan embassy

  • The embassy says Afghan nationals in Rawalpindi and Islamabad are facing arrests and police searches
  • Many are waiting to be resettled in a third country, with Pakistan warning they can’t stay permanently

ISLAMABAD: Pakistan wants to remove all Afghan refugees from the country and they face expulsion in the near future, the Afghan embassy in Islamabad warned Wednesday.
The embassy issued a strongly worded statement about Pakistan’s plans, saying Afghan nationals in the capital, Islamabad, and the nearby garrison city of Rawalpindi have been subjected to arrests, searches, and orders from the police to leave the twin cities and relocate to other parts of Pakistan.
“This process of detaining Afghans, which began without any formal announcement, has not been officially communicated to the Embassy of Afghanistan in Islamabad through any formal correspondence,” it said.
“Ultimately, officials from Pakistan’s Ministry of Foreign Affairs confirmed that there is a definitive and final plan to deport all Afghan refugees not only from Islamabad and Rawalpindi but also from the entire country in the near future,” the embassy said.
There was no immediate comment from the Pakistani government on the Afghan statement.
The latest development comes more than two weeks after Pakistan’s government threatened to deport Afghan nationals living in the country illegally.
Pakistan’s Prime Minister Shehbaz Sharif had approved a deadline of March 31 to deport those awaiting relocation to third countries unless their cases are swiftly processed by the governments who have agreed to take them after the Afghan Taliban seized power in 2021.
The Afghan embassy criticized “the short timeframe” given and “the unilateral nature of Pakistan’s decision.”
Besides hundreds of thousands of those living illegally in Pakistan, there are around 1.45 million Afghan nationals registered with UNHCR as refugees. Pakistani authorities say those who were registered earlier had their stay extended until June 2025, and will not be arrested or deported at least until the extension expires.
Earlier this month, Shafqat Ali Khan, the spokesman at Pakistan’s Ministry of Foreign Affairs, had said: “This resettlement problem can’t be indefinite. So, for us, the Afghans who are here, awaiting resettlement also has to be a transitory phase. This is not a permanent thing.”
He said Pakistan has been collaborating with Western countries to expedite the resettlement program and “will continue to do that.”
In the past three years, tens of thousands of Afghans have fled to Pakistan. Many of them were approved for resettlement in the US through a program that helps people at risk because of their work with the American government, media, aid agencies and rights groups. However, after US President Donald Trump paused US refugee programs last month, around 20,000 Afghans are now in limbo in Pakistan.
These Afghans have been facing harassment and even arrest since October 2023, when Pakistan began cracking down on foreigners living in the country illegally.
Although the government said the campaign was not aimed at Afghans, they make up the majority of foreigners in Pakistan. Since then, more than 800,000 Afghan nationals have been deported or forced to leave the country under a so-called voluntary repatriation plan.
The International Organization for Migration has also reported an increase in deportation of Afghans in January.
IOM this week in a report said, “Afghan nationals are being deported to Afghanistan from Islamabad and Rawalpindi.” It said there is an increase of 13 percent in those Afghans returning home from Jan. 16 to 31 compared to the first two weeks in January. It said 824,568 Afghans have returned home since 2023.
Ahmad Shah, a member of an Afghan advocacy group, urged Pakistan on Wednesday to allow Afghans waiting for relocation to continue living in Islamabad at least until the Trump administration makes a final decision about their fate.
He said it would be hard for them to visit Western embassies in the Pakistani capital if they are moved to other areas.


Pakistan’s army chief arrives in UK to attend military forum, hold talks with senior leadership

Updated 19 February 2025
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Pakistan’s army chief arrives in UK to attend military forum, hold talks with senior leadership

  • General Asim Munir address a conference on Pakistan’s future outlook amid the emerging world order
  • He will also meet British civil and military leadership to discuss strengthening of ties between both states
ISLAMABAD: Chief of Army Staff General Asim Munir has reached the United Kingdom to attend a platform for military-to-military dialogue between the two countries and hold talks with the British civil and military leadership, an official statement announced on Wednesday. The 7th Regional Stabilization Conference is an annual event held at the Royal Military Academy Sandhurst in the UK. It facilitates bilateral collaboration and understanding by bringing together civil and military policymakers, as well as think tank members from both countries, according to the military’s media wing, the Inter-Services Public Relations (ISPR). The 2025 conference is significant due to the rapidly evolving geopolitical landscape, offering an invaluable opportunity to exchange perspectives and explore pathways for enhanced bilateral cooperation, it added. “Chief of Army Staff General Munir is on an official visit to the United Kingdom to participate in the 7th Regional Stabilization Conference at the esteemed Royal Military Academy Sandhurst where he will deliver the keynote address on ‘The Emerging World Order and Pakistan’s Future Outlook,’” the ISPR said. “On the inaugural day of his visit, General Munir was accorded a warm and dignified welcome including a ceremonial Guard of Honour at the historic Royal Horse Guards Parade Ground presented by an impeccably turned-out contingent.” The ISPR added the Pakistani army chief would meet UK Chief of Defense Staff Admiral Toney Radikon, British Army Chief of General Staff General Sir Roland Walker and UK National Security Adviser Jonathan Nicholas Powell to discuss matters of mutual interest. He will also engage in discussions with UK Home Secretary Yvette Cooper to address shared challenges apart from underscoring the importance of fostering deeper collaboration between both countries. The ISPR said General Munir will visit prominent British Army units including the Land Warfare Center and the 1st Strike Brigade where he will be briefed about the “modernization initiatives and operational strategies.” “The visit highlights the enduring partnership between the two nations, reaffirming their shared commitment to regional stability and global peace,” the statement said. Pakistan and the UK have witnessed high-level visits between their military leaders, in an effort to strengthen defense ties and collaboration. Last August, Chairman Joint Chiefs of Staff Committee General Sahir Shamshad Mirza met with top British military officials to discuss bilateral defense and security cooperation. The two countries share a long-standing relationship built on strong diplomatic, economic and security ties. Over the years, both militaries have maintained robust cooperation, particularly in the fields of counterterrorism and professional training. Their existing defense partnership includes Pakistani officers undergoing training at Sandhurst and the Royal College of Defense Studies.

PM Sharif urges Bahrain to increase trade volume with Pakistan

Updated 19 February 2025
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PM Sharif urges Bahrain to increase trade volume with Pakistan

  • The prime minister meets 11-member Bahraini parliamentary delegation
  • Trade between both countries has ranged between $500 million to $1 billion

ISLAMABAD: Prime Minister Shehbaz Sharif has invited Bahraini nationals to invest in Pakistan, his office said on Wednesday, urging increased trade between the two countries as Islamabad aims to strengthen economic ties and attract foreign investors, particularly in the Gulf region.
After narrowly avoiding a sovereign default in 2023 and securing a last-minute International Monetary Fund (IMF) bailout, Pakistan is strengthening business and investment ties with regional allies, including China and Central Asian states, to overcome the impact of a prolonged macroeconomic crisis.
Sharif met with an 11-member Bahraini parliamentary delegation, led by Bahrain’s Council of Representatives Speaker Ahmed bin Salman Al-Musalam, to discuss ties between the two countries.
“The prime minister invited Bahraini investors to invest in Pakistan,” the PM Office said in a statement. “The PM urged efforts to increase the current trade volume between Pakistan and Bahrain.”
According to the foreign office, Pakistan’s trade with Bahrain ranges between $500 million and $1 billion. Major exports include meat, vegetables, rice, tobacco and textiles. Imports from Bahrain include petroleum and its products, ferrous waste, scrap and aluminum.
Sharif called for strengthening people-to-people connections to further enhance ties between both countries, the statement continued, adding he also highlighted the “valuable services” provided by Pakistani nationals in Bahrain.
He urged Bahrain and other Muslim states to increase their support for the residents of Gaza, apart from extending his wishes to Bahraini King Hamad bin Isa bin Salman Al Khalifa.
Earlier this month, Finance Minister Muhammad Aurangzeb said Pakistan saw huge potential in the Gulf Cooperation Council (GCC) market, comprising Saudi Arabia, the United Arab Emirates, Bahrain, Qatar, Kuwait and Oman.
Pakistan has intensified its outreach to international partners and allies in recent months as it navigates a fragile economic recovery, backed by a $7 billion IMF facility granted last September.


Pakistan, Saudi forces conclude naval drills with display of firepower and combat tactics

Updated 19 February 2025
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Pakistan, Saudi forces conclude naval drills with display of firepower and combat tactics

  • The two countries maintain close defense ties, with their navies regularly participating in joint drills
  • Affaa Al Sahil follows Naseem Al Bahr-XV and Aman 2025 exercises to enhance maritime coordination

ISLAMABAD: Pakistan and Saudi Arabia concluded their annual Affaa Al Sahil naval exercise in Karachi on Wednesday with a demonstration of intense firepower, close quarter combat and hostage rescue, according to a statement by Pakistan’s military media wing, the Inter-Services Public Relations (ISPR).
The exercise, which has been conducted annually since 2011 between the Pakistan Navy’s Special Service Group and the Royal Saudi Naval Forces’ Special Operations Forces, focused on enhancing interoperability and tactical coordination.
It follows Naseem Al Bahr-XV, another bilateral naval exercise between the two countries, and Aman 2025, a multinational maritime drill aimed at promoting regional maritime cooperation.
“The joint naval exercise Affaa Al Sahil between the Pakistan Navy and the Royal Saudi Naval Forces’ Special Operations Forces concluded in Karachi,” the ISPR said in a statement.
“The training drills included RPG [rocket-propelled grenade] firing, machine gun firing, close quarters combat, practical rappelling, hostage rescue, visit board search and seizure, explosive ordnance disposal drills, mission planning and advanced area clearance techniques,” it added.
The closing ceremony of the exercise was attended by Commander Coast Rear Admiral Faisal Amin along with senior officials from both navies.
Pakistan and Saudi Arabia maintain close defense ties, with their navies regularly participating in joint drills to improve maritime security and counter asymmetric threats in the region.
“This joint exercise will help strengthen mutual capabilities and coordination in countering maritime security challenges,” the ISPR added.