Pakistan's inflation has hit a record high of 36.4%, surpassing Sri Lanka's, which recorded a sharp decline from 50.3% in March to 35.3% in April. The surge in inflation in Pakistan is due to the weaker currency, skyrocketing food prices, and rising energy costs. The finance ministry has projected that inflation will remain in the range of 36-38% mainly due to the rupee's depreciation and rising prices, which contributed to the increase in overall prices. Pakistan's rupee is one of the worst-performing currencies globally, declining 20% to the dollar in 2023.
Transport prices climbed 56.8%, while food inflation rose 48.1% in April from a year earlier. Meanwhile, former Pakistan Prime Minister Imran Khan and other citizens have slammed Finance Minister Ishaq Dar and Prime Minister Shehbaz Sharif for the worsening crisis at home. Khan claimed that inflation stood at 12.6% when a vote of no confidence was tabled against him last year, and now inflation in Pakistan outpaces Sri Lanka as Asia's fastest.
Khan further said that the current government has crushed the masses and especially the salaried class under record inflation in the country's history, and their excuse for bringing about regime change was to control inflation, which they have failed to do. He was referring to the National Reconciliation Ordinance (NRO), a controversial law that provided amnesty to politicians, bureaucrats, and other public officials accused of corruption, embezzlement, and other crimes committed between January 1, 1986, and October 12, 1999.
Many citizens believe that the government doesn't care about the woes of the people. Amin Zuberi, a Twitter user, said that while people were facing the highest inflation, the country's politicians were busy playing negotiations, and judges were busy instructing to play negotiations-negotiations. "Nobody is bothered for us," he said.
AA H Soomro, a financial analyst, said that Pakistan has beaten Sri Lanka's inflation "without having the need to default." He added that Pakistan has touched a new low, killing the next set of growth, and the rupee's descent has pushed brains out.
Just days ago, former Pakistan finance minister Miftah Ismail said the country had been entangled in unsustainable high debt and it would not come out of the mess until it increases tax revenue and carries out structural reforms. He stated that unless Pakistan ends this long-term unsustainable deficit, it cannot get out of this mess. The former finance minister said that even if the government doubles or triples the tax structure, it cannot get out of this crisis unless it increases its tax-to-GDP ratio by 15% and export-to-GDP ratio by 15%.
Pakistan has to pay $25 billion each year, and this is creating trouble for the country due to lower growth. "We will be in the same dilemma for the next two years and will go into one more IMF Programme," he said. The country must take immediate measures to curb inflation and tackle the root cause of the issue to prevent further economic damage.
