Business

October inflation eases to 23.8% in Pakistan

Published

2 years ago

Farwa

Inflation number is in line with Ministry of Finance’s outlook.
On a monthly basis, inflation moderates to 0.8% in November.
Going forward, economist expects inflation to come down further.

ISLAMABAD: The inflation rate eased to 23.8% last month compared to October’s record high inflation of 26.6% in line with the Ministry of Finance’s monthly outlook as the high base effect kicked in.

The latest inflation bulletin from the Pakistan Bureau of Statistics (PBS) also showed that the pace of price hikes also slowed down to 21.6% and 27.2% in urban and rural areas; however, the constant double-digit inflation in the country has adversely affected people’s purchasing power.

On a month-on-month basis, inflation moderated to 0.8% in November, compared to a whopping increase of 4% in the previous month and 3% in November 2021.

Economist Sana Tawfiq, while speaking to Geo.tv, cited a lower jump in food prices as a significant reason behind this month-on-month decline.

“Reasons for month-on-month moderation was lower jump in food prices with food index up meagre 0.1%, also transportation was down 0.1%.

“On the contrary; housing, clothing and household equipment indices were up monthly basis mostly showing a jump in winter-related items such as woollen garments and dry fruits,” she added.

The Ministry of Finance in its monthly outlook report had mentioned that inflationary pressure was expected to ease marginally in November due to smooth domestic supplies, unchanged energy prices and a stable exchange rate.

The prices of both non-perishable increased last month. The food group prices surged nearly 28.92% in November in comparison with the same month a year ago. The PBS data, however, showed that the prices of perishable food items decreased by 0.27%.

On a year-on-year basis, the pace of food inflation eased to 29.7% in cities and declined to 33.5% in villages and towns last month, according to PBS.

Non-food inflation dropped to 16.4% in urban areas and 21.4% in rural areas compared to the same month last year, according to the national data collecting agency.

Core inflation — calculated after excluding food and energy goods — eased to 14.6% in urban areas. However, it increased to 18.5% in rural areas. Tawfiq expressed concern over elevated core inflation as the economist believes higher core inflation is “alarming”.

“We expect headline inflation to come down further going forward, supported by high base,” Tawfiq predicted.

Price of essential kitchen items

The prices of onions — an essential vegetable used in all households — were higher by over 34% last month compared to September, followed by a 14.79% increase in the rates of tea, and nearly 14.5% in various the price of potatoes and dry fruits, according to the PBS.

However, the prices of vegetables decreased in a range of 10-30%, chicken by 5.08%, and rates of various pulses by over 5%, according to PBS.

Business

Gold prices in Pakistan approach an all-time high.

Published

21 hours ago

Farwa

Following a substantial surge the prior day, gold prices in Pakistan are ascending to unprecedented levels with an additional gain on Thursday, coinciding with a rise in global precious metal rates.

The price of 24-karat gold in the local market rose by Rs700 per tola, reaching Rs277,900, as reported by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Likewise, the cost of 10 grams of 24-karat gold increased by Rs600, currently priced at Rs238,254.

Globally, gold prices exhibited an upward trend, increasing by $7 throughout the day. The APGJSA reports that the international gold price was $2,682 per ounce.

Notwithstanding the increase in gold prices, the silver market exhibited stability, with the price of silver maintained at Rs3,050 per tola.

In the previous month, gold prices in Pakistan reached an unprecedented high of Rs 277,000 a tola, driven by substantial gains in the worldwide market.

Business

World Bank: Power industry subsidies soar by 400% in just five years.

Published

22 hours ago

Farwa

Ninety-four percent of domestic customers will benefit from the budgetary subsidy in 2024, according to a World Bank report, which credits the increase in protected consumers with contributing to the weight of subsidies.

In the current fiscal year, the electricity sector subsidy has increased by an astounding Rs. 954 billion, from Rs. 236 billion in the 2020 fiscal year to Rs. 1190 billion.

Notwithstanding changes, the circular debt has averaged Rs. 400 billion yearly over the last four years due to the incapacity to minimize losses and inadequate recovery of electricity payments.

According to the World Bank, the government must solve the fundamental problems in the power industry in order to lower the burden of subsidies and circular debt, as rising electricity prices and inadequate tax collection will only serve to worsen the circular debt crisis.

The rise in Pakistan’s power sector circular debt has raised worries from the World Bank (WB) despite an unprecedented increase in energy pricing.

Within the last six years, the debt has grown by 1241 billion rupees, according to the World Bank’s study. Between 2019 and 2021, the debt climbed by 1128 billion rupees.

The electricity sector’s circular debt has been increasing at an alarming rate, according to a World Bank analysis. Between 2022 and 2024, there was a substantial increase of 113 billion rupees.

Pakistan’s electricity industry has 2393 billion rupees in total circular debt as of 2024.

Restructuring is required to solve the circular debt issue, according to the World Bank.

Business

Final settlement: Govt to pay five IPPs Rs 72 billion.

Published

22 hours ago

Farwa

On October 10, Prime Minister (PM) Shehbaz Sharif declared that the agreements with five IPPS would be terminated in the first phase. Sources claim that the government will give Rs 15.5 billion to Rousch Power and Rs 36.5 billion to Hubco.

In a same vein, the federal government would pay Lalpir Power Rs 12.8 billion, Atlas Power Rs 15.5 billion, and Sapphire Power Rs 6 billion.

The sources state that late payment fees are not included in the settlement. With effect from October 1, the agreements with the five IPPs will be considered officially ended.

PM Shehbaz earlier remarked that the termination was carried out with the owners of the IPPs’ mutual permission while presiding over the federal cabinet meeting in Islamabad.

The Prime Minister notified the Cabinet that the only money that will be paid, interest-free, to these IPPs is the outstanding balance.

According to him, the national exchequer will gain over 411 billion rupees from the termination of these contracts, while power customers will save roughly sixty billion rupees.

According to Prime Minister Shehbaz Sharif, it was the result of the arduous teamwork of the entire government. In this regard, he also acknowledged the contributions and assistance of the associated parties. He specifically mentioned General Asim Munir, the Chief of Army Staff, who showed a personal interest in the situation.

The prime minister characterized the development as the start of a trip that will ultimately lead to the advancement and prosperity of the populace.

PM Shehbaz Sharif also brought up the assistance that the Punjabi and Federal governments gave to power users over the summer.