LAHORE: The Businessmen Panel (BMP) has sounded the alarm over a renewed surge in inflation, warning that recent hikes in utility tariffs and food prices are intensifying pressure on already struggling households and industries.
The caution follows the latest figures from the Pakistan Bureau of Statistics (PBS), which reported a 4.07 percent week-on-week increase in the Sensitive Price Indicator (SPI) for the week ending July 24, 2025.
The increase, among the sharpest in recent weeks, was largely driven by a staggering 29.85 percent rise in gas charges and a 21.46 percent increase in electricity tariffs.
Key food items such as tomatoes and eggs also saw notable hike of 22.93 percent and 3.96 percent, respectively. The lowest-income group, categorised as Q1 by PBS, was hit hardest, facing a 3.98 percent rise in their weekly cost of living.
Mian Anjum Nisar responded to the data with serious concern, calling the current inflationary trend dangerous and unsustainable for both consumers and producers. He criticized the government’s policy approach, saying that the burden of fiscal reforms and IMF commitments was being unfairly passed on to the public and private sectors without protective measures in place.
He said the removal of energy subsidies and subsequent price shocks are driving both households and manufacturers to a breaking point. He said the absence of a comprehensive policy to shield vulnerable segments and support industrial production has created a dual crisis of rising living costs and shrinking economic activity. The surge in inflation, he added, is not just an economic indicator—it is a warning sign that the broader structure of the economy is under strain.
Nisar linked the latest surge to international energy price movements, domestic gas and electricity tariff adjustments, and disruptions in food supply chains. He suggested that monthly inflation measured by the Consumer Price Index (CPI) for July 2025 is likely to reach 3.3 percent year-on-year. The CPI is expected to reflect a 15 percent month-on-month increase in electricity tariffs and a 22.7 percent rise in gas prices, as the government normalizes administered prices in line with fiscal reforms.
Anjum Nisar criticized this normalization process, stating that it ignores the realities on the ground. He said industries are being squeezed by high input costs, while consumers are struggling with the rapid erosion of purchasing power. He noted that food inflation, combined with utility price hikes, is making daily life unaffordable for large sections of the population. Meanwhile, the export sector continues to face setbacks due to rising costs, refund delays, and international demand slumps.
He also expressed alarm over broader economic indicators. The country has witnessed a significant drop in exports, foreign direct investment, and remittances. At the same time, private sector borrowing is shrinking, and manufacturing activity has declined. He attributed these negative trends to policy instability, exchange rate volatility, and a lack of incentives for industrial revival. According to him, unless corrective steps are taken urgently, the country risks deeper stagflation.
He said the recent inflation surge is not a one-time spike but part of a dangerous cycle rooted in structural imbalances. He stressed the need for agricultural reforms to stabilize the food supply chain, greater investment in storage and logistics, and improved coordination between federal and provincial authorities to manage market disruptions.
Regarding the upcoming monetary policy announcement by the State Bank of Pakistan on July 30, Anjum Nisar urged a cautious and balanced approach. He said that while inflation control is essential, monetary tightening must not come at the cost of choking industrial activity. He called for targeted subsidies for low-income households and special energy pricing mechanisms for export-oriented industries and SMEs.
Copyright Business Recorder, 2025
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