Govt push for taming food inflation.

Byline: Nasir Jamal

Last week -- ast week, the federal cabinet took notice of the increasing food prices, a major source of surging inflationary pressures in the economy. It ordered (administrative) steps for controlling prices of essential food items and devise a strategy to curb inflation.

The cabinet also decided to activate the provincial price control committees and deal strictly with hoarders and speculators. Even though the administration has a very limited ability to control the markets, it is good news that the government has finally realised its responsibility to deal with surging inflation and chip into the central bank's efforts to stabilise the prices.

Inflation, a phenomenon whereby the prices of everything persistently increases, and the value of money or the purchasing power of people declines, is one of the major problems facing Pakistan for more than the last one year.

The monthly headline inflation as measured by the Consumer Price Index (CPI), which has been running in double digits since the inception of the present financial year, was recorded in September at an eight-year high of 12.5 per cent (base year 2005-06) compared with 10.6pc the previous month and 5.1pc a year ago. Core inflation - the non-food, non-energy (NFNE) inflation, also escalated to 9.2pc from 8.5pc in August and 5.8pc from a year ago.

The current phase of the price hike is a reflection of the macroeconomic adjustments being made

Measured against the new base year of 2015-16, the CPI inflation clocked in at 11.4pc, which still was in line with the forecast of the State Bank of Pakistan (SBP) that held back from cutting the policy rate last month in spite of the strong demand from the country's business community.

According to official data for last month, urban dwellers faced a slightly higher increase of 11.6pc in prices. Similarly, the 40 cities from where inflation data is collected saw an uneven distribution of the pace of price rise. The people in Dadu, Sindh, for example, had to cope with the highest rise of 21.2pc in food prices while Mardan, Khyber Pakhtunkhwa, led in non-food inflation with a spike of 18.7pc.

In many cities, the CPI clocked in between just 5pc and 9.9pc. The uneven pace of price increase in rural and urban areas, as well as cities, is attributed mainly to different consumption patterns and income levels of households.

Financial analysts are projecting inflation to start receding into single digit from the third quarter of...

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