Pakonomics notes the budget targets have been formulated in a politically constrained environment, but assesse Pakistan’s outlook as “unpredictable” because of political instability.
By Staff Reporter
ISLAMABAD: The authorities need to look into food inflation despite growing crop yields, and institute a price ceiling mechanism for key food items, according to the June issue of Pakonomics, a monthly briefing on the performance and outlook of the Pakistan’s economy by a Karachi management consultancy firm.
Received here via the Internet, the July Pakonomics assesse Pakistan’s outlook as “unpredictable”, although it notes how Pakistan’s economic targets for the current fiscal have been “formulated in a politically constrained environment” under the vigilant gaze of the International Monetary Fund (IMF).
The basis cited for this assessment is “continuing negative developments”, especially the prevailing political uncertainty.
“Annual plan targets for FY23 of GDP at 5.0%, inflation at 11.5%, and other key indicators seems unrealistic, given the ongoing fragile economic situation and political chaos”, says Pakonomics. “Given the poor state of the economy of Pakistan, notably the low level of foreign exchange reserves, the annual targets are likely to be exceptionally difficult to achieve.”
Looking at inflation, Pakonomics notes the rate of inflation is faster since the last six months. It says the fundamental question is if this rate will die down in the short run or continue into the next fiscal.
“This might be largely dependent on the future path of the international commodity prices. A high rate of CPI might persist in the case of petroleum lubricants on the back of the Government’s commitment of petroleum levy by March 2023.
“While on the other hand, rise in food inflation despite of high growth in major and minor crops needs to be evaluated by both, the Provincial and the Federal Government. Moreover, a price ceiling mechanism needs to implement to curb soaring food inflation.
Embedded below is the July issue of Pakonomics, published electronically by the Karachi based Tola Associates headed by Ashfaq Tola, FCA.
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