Amidst ominous political developments in the capital, the monthly inflation reading from PBS seems to have fallen on deaf ears, blind eyes, and numb brains. At 12.6 percent, headline inflation during Q1-CY22 is highest-ever under new base, with third-highest monthly figure since PTI came to power.
It seems that the trickledown from global commodity price spiral is now making full appearance in consumer prices. Yet, images from Islamabad suggest that a band of Nero-esque artists is vying for a place in an orchestral performance in a soon-to-be-burned-down amphitheater. The PM – at least the one till the time of this writing - believes he has alleviated all pain by freezing petroleum prices, impervious to what is to follow. And to follow very soon.
Month-on-month numbers suggest that the latest round of inflation is only just beginning, with only a short-teaser released thanks to latest round of currency depreciation. Sooner or later, the inevitable adjustment in fuel prices will deliver the first pack of punches. It will be quickly followed by a massive revision in flour prices due by mid-year,squeezing the spirit out of even the most ardent party loyalists.
The incumbent regime relentlessly insists that inflation is purely an outcome of post-Covid global demand resurgence. Lest it be forgotten, inflation came close to 15 percent pre-Covid as well, when flour and sugar prices leapt out of control in Jan-20. In sharp contrast, Mar-22 CPI recording for both flour and sugar is on a monthly decline, along with a freeze on petroleum prices. What happens once these heavy weights reverse trajectory?
While the PTI refuses to let go off reins, the opposition is just as keen to take its position. Meanwhile, analysts are left shock-shelled wondering why either of them would wish to rule at such a precarious juncture. Is it arrogance? Or an endless supply of faith in personal competence to pull off what no leader - even in the developed world - has been able to, and beat inflation? Or an impetuous scheme to takeover at the brink of calamity, so they may be able to claim victory once the storm passes?
It is very hard to separate pride from politics. But politicians better hope that no outside force shares their hubris.
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