Global Rice News

The Struggling Economy: Impact on Purchasing Power

The economy is facing significant challenges, with little progress made in efforts to revive it. Inflation has skyrocketed, severely affecting the purchasing power of both the average citizen and the more affluent. According to the Pakistan Bureau of Statistics (PBS), short-term inflation has reached an alarming 40% for the second consecutive week. Gas prices have also surged by a staggering 1,100%, rendering essential commodities unaffordable. As the government grapples with its financial struggles ahead of the IMF meeting, further increases in gas and electricity prices are anticipated, pointing towards an imminent supra-inflation scenario.

Rising Prices of Essential Commodities

The prices of essential commodities have soared to alarming levels. Wheat flour has witnessed an 88.2% increase, broken basmati rice has risen by 76.6%, garlic by 71%, Irri-6/9 rice by 62.3%, tea by 53%, and potatoes by 47.9%. Moreover, there has been a two to six percent surge in the prices of onions, chicken, potatoes, and pulses. The absence of effective governmental control on black-marketers exacerbates this inflationary trend, posing a severe threat to the public. Additionally, reports indicate that the dollar is once again on the rise, disregarding the positive performance of the stock market and the government’s efforts to curb smuggling.

Critical Need for Structural Reforms

The economic health of the country is in disarray and urgently requires comprehensive structural reforms. These reforms should not solely burden the common man through increased taxes. The federal government’s plan to broaden the tax net, primarily targeting the salaried and middle classes, is met with pessimism. The strategy aims to increase the number of income tax return filers from 4.9 million to 6.5 million within the next eight months, but it is likely to spark a debate. A valid question arises as to why the rich and powerful, particularly those in real estate and feudal lords, are not being subjected to higher taxes. Furthermore, curtailing excessive privileges and perks could serve as a means to generate additional revenue. It is clear that combating inflation requires a multifaceted approach.

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