Rising prices of food and petroleum products in the international market has escalated the inflation rate in Pakistan, said Executive Director SPDI Abid Qaiyum Suleri.
Talking to a private channel, on the rising inflation rate SPDI economist said that apart from administrative issues two major developments have accelerated the problem.
“Pakistan is moving towards becoming a food importing country with items such as wheat sugar and pulses and oil are being imported. If you look at the international markets the rates of such commodities for example the soybean oil price has increased by 70 percent from October to December 2020, whereas, the rates of pulses have increased by 32pc in international markets,” he said.
“If you look at the petroleum products in December receiving oil at $40 per barrel which now stands at $70 per barrel,” he said. The rise in rates of food and petroleum production ports in the international market have affected the domestic market, said Suleri.
Last week, the state-run Trading Corporation of Pakistan (TCP) has issued two new international tenders to purchase and import 300,000 tonnes of wheat and 50,000 tonnes of white sugar to meet local shortfall.
Suleri further said that the purchasing power of people have diminished significantly due to the coronavirus pandemic, which has increase the intensity of rise in inflation rate. “All multilateral organisations including United Nations agreed that due to COVID-19 pandemic the purchasing power has diminished globally, similar is the case in Pakistan,” he said.
Suleri who also serves as the member of Prime Minister’s Economic Advisory Council pointed that out that in order to address the drop in agricultural output there is a need to overhaul the agriculture system.
“Coronavirus pandemic has shown us that being a service oriented economy is not feasible and we need to strengthen our agricultural sector otherwise Pakistan will not be able to survive if it continues to import food commodities,” he said.
Suleri further said that the government should focus on targeted subsidy to poor masses and improve its governance system.