Govt made upward price adjustments to correct macroeconomic imbalances in FY20

June 12, 2020: To correct the macroeconomic imbalances, Government made difficult decisions of upward adjustment in overdue gas and electricity prices, market-based exchange rate adjustments etc. Furthermore, increase in commodity prices in international market also pushed up the domestic prices. During first seven months of CFY, inflationary pressures were observed, and headline inflation rose to 14.6 percent in January 2020.

According to Pakistan’s Economic Survey, the inflation rate started easing out due to government policies after January and for the period July-April FY2020 recorded at 11.2 percent against 6.5 percent during the same period last year. The other inflationary indicators like Sensitive Price Indicator (SPI) recorded at 14.3 percent against 4.2 percent over the same period last year. Wholesale Price Index (WPI) recorded at 12.2 percent during Jul-April FY2020 compared to 16.2 percent same period last year.

The government is making all out efforts to ensure smooth supply of essential items and is also committed to taking strict actions against anti-competitive practices. Economic Stimulus Package, Ehsas Emergency Relief Programme, Subsidies to USC and reduction in petroleum prices, etc., will provide multidimensional positive impacts to all segments of society especially poor families. All these measures helped in contracting the CPI to single digit which fell to 8.5 percent in April 2020. This was third successive month showing decline in inflation, whereas it dropped more than 6 percent in last three months.