Further hike in power tariffs to raise cost-push inflation: economist

KARACHI: Ateeq ur Rehman, economic & financial analyst, has said that any further increase in electricity prices will bring detrimental impact on common man and raise cost push inflation.

In a statement here Sunday, he said while again going to IMF, external debt management strategy coupled with strong institution arrangements and privatisation of loss-making entities is necessary. He asked to stop growth of circular debt, increase resilience of producing indigenous raw material and improve import substitution industry.

Going to IMF for financial arrangement is unavoidable but we have to overcome our internal weaknesses, too, he said. The last review of Pakistan’s ongoing bailout program by International Monetary Fund team has started. Government of Pakistan has shown firm commitment on working with IMF on the reforms agenda for economic growth and stability of the country. Meetings are in progress for overall macroeconomic indicators, efforts are on regarding fiscal consolidation, structural reforms, energy sector viability and state-own entity governance, said Ateeq ur Rehman

The biggest advantage of the IMF program will be providing precious foreign currency liquidity and building confidence of multilateral and bilateral lenders, he said.

He said that for IMF, we have to meet tax revenue targets by further increasing taxes. We are already heavily relying on 80% indirect taxes. Further expanding the tax net to increase the tax to GDP ratio will cause undue hardship to lower income group. Secondly, IMF’s dictate on the removal of subsidies without any compensation is hitting deprived class in terms of inflation, lay offs, high cost of doing business, utility and fuel prices hike, he said.

Copyright Business Recorder, 2024