Asad Umar says inflation expected to remain high till at least March

Ruling out an immediate relief, Minister for Planning, Development, and Special Initiatives Asad Umar said on Monday that it could take at least five months for the increase in global commodity prices to head towards normalcy.

Addressing a news conference, the minister said that inflation was not expected to subside before March 2022, saying that experts have also predicted that the reduction in prices can even take as long as June.

Umar said that the coronavirus pandemic caused an unusual disruption to the global economy, after which the world has found it difficult to cope with the demand-hike as well as supply-chain disruptions.

He pointed out that while the world is going through an extraordinary situation in terms of commodity prices, the rates of basic commodities are still lower in Pakistan.

However, Umar said due to soaring inflation in recent months, the purchasing power of people have been affected in Pakistan.

Govt increases petrol price by Rs10.49 per litre

The minister shared that a programme has been prepared to extend targeted subsidy on essential commodities to the marginalised segments of the society.

"Prime Minister Imran Khan will share details of this program in the next few days whilst benefit of this program will start reaching the people by the end of next month," the minister said.

Umar further shared that the government has decided in principle to reduce the edible oil price by Rs45 to Rs50 per kilogramme, adding that this will be achieved by reducing taxes on edible oil.

Sales tax on edible oil will be cut from 17% to 8.50%, customs duty per ton to be halved and additional customs duty will be abolished, Umar added.

The government has come under heavy criticism in recent weeks as the pace of inflation increases in Pakistan, affecting people's purchasing power and their real incomes. The situation comes in tandem with the fall of the rupee that on Monday hit its weakest level of 172.8 against the US dollar in the inter-bank market.

While the central bank has implemented various measures, the rupee has shown no signs of stabilising in the last five months, having shed nearly 12% of its value against the greenback.

Over the weekend, Pakistan, a net importer of oil, also saw an increase of over 8% in its fuel prices, aggravating the inflation situation in the country where poverty levels remain on the higher side.