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Buying power shrank in Pakistan in 2019

SAMAA | - Posted: Jan 2, 2020 | Last Updated: 3 months ago
Posted: Jan 2, 2020 | Last Updated: 3 months ago
Buying power shrank in Pakistan in 2019

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The increase in inflation from 6.9% to 12.6% in 2019 put the squeeze on the people’s pockets in Pakistan.

The 1kg bag of potatoes, which used to cost Rs24 in Karachi in December 2018, now costs at least Rs43.3. This is an 80% increase over the year.

People in government insist that the economy is on the right track. They argue that all economic indicators paint a promising picture of our overall financial future. But the numbers on the ground tell a different story.

An essential like sugar went up by 22% from Rs58.4 to Rs71 per kg in Karachi over the last year.

You can cut down on sweet stuff and avoid potatoes to an extent but what about the most fundamental food item of all: wheat. The 10kg bag of wheat priced at Rs451 in December 2018 costs Rs567 today. This is a huge jump of 26%.

For those who cook dinner or use geysers, gas prices climbed by 70% as well.

The purchasing power of people could not keep up with increasing inflation. The minimum wage of a person is Rs17,000 as per the federal standards. But in reality, daily wagers earn much less.

Loans from the IMF and ‘heavy foreign investments’ in our treasury bills may have given us some respite on the macro level, but they will soon mature and the government will pay these loans back at a historic high interest rate of more than 13%.

Also the figures above — taken from State Bank of Pakistan and Pakistan Bureau of Statistics — explain how well are we doing on the micro-economic front.

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