‘Cost of borrowing also increasing’: Social instability growing due to high energy, food prices: analyst

KARACHI: Social instability is growing in Pakistan due to three major challenges, namely rising energy prices, hike in prices of essential foods and commodities, and enhancement in cost of borrowing.

That’s why the country’s economic outlook has worsened significantly, says economic and financial analyst Ateeq-ur-Rehman.

“We are facing highest built-in monthly fuel adjustment charges in our electricity bills due to unbearable cost of negligence by the concerns and due to some power projects declared to be problematic; consequently the poor people and the middle class are the hardest-hit sections (of the population),” he said.

He added that the central bank is continuously raising interest rates to contain prices and inflation, which is increasing the cost of borrowing as debt burden is growing by the day.

The victims of the increasing cost of energy and food do want to borrow money for fulfilling their needs, but due to the heavy cost of credit avoid availing this financing facility.

Ateeq-ur-Rehman said such people face the challenge of paucity of funds to cope with the daily expenses. He claimed that the current calendar year is going to be tough and the next one is probably going to be tougher.

“In order to get relief over these challenges we should seriously and sincerely plan to increase our agricultural produce, opt for alternative energy solutions like solar and wind energy and drastically reduce the markup rates,” said the senior analyst.

Copyright Business Recorder, 2022