TRAGEDY OF ERRORS

High inflation has pushed millions of Pakistanis into poverty, and 20 per cent of the population into near starvation. Currency devaluation, import controls and the bailout deal with the IMF could further worsen Pakistan's economic crisis

- MEHMAL SARFRAZ

Pakistan is facing a severe economic crisis, with inflation going through the roof. Inflation has averaged a record 25.4 per cent this fiscal year. It was 10.3 per cent a year ago. The consumer price index went up by 27.5 per cent in January, the highest in nearly 50 years, while the rupee lost its value by more than 35 per cent.

The purchasing power of Pakistanis has plummeted. Economist Yousuf Nazar said food inflation, at 40 per cent, was one of the highest in the world. “It is a killer and has pushed millions into poverty and the bottom 20 per cent of the population into near starvation or begging. It will get worse with the sharp devaluation of the rupee in the recent weeks,” said Nazar. “Pakistan needs a complete reset in its policies but there is no likelihood that it would be in a position to do it in the near future. The best Pakistan can hope for is a collapse in global energy prices. In the long run, Pakistan’s ruling elites will have to restructure the economy to grow and create employment because there is simply no silver bullet.”

Shahid Irshad, a video editor who works two jobs, said his monthly expenditure had gone up in the last few months because of the increase in petrol prices and the high inflation. “It is very difficult to manage my household expenses even with two jobs. My two children go to school. My income has not increased while our spending has gone up by at least ₹30,000 per month, which is a huge burden.”