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KCCI President skeptical about Pakistan’s ranking on Numbeo

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February 21, 2022:  While referring to Finance Minister’s tweet about latest Numbeo’s cost of living index in which it has been claimed that Pakistan was the cheapest country amongst 139 countries of the world, President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Idrees stated that this ranking cannot be taken into consideration, said a press release issued on Monday.

This ranking was mainly based on low rent and groceries index whereas the other major components like low per capita income, rate of inflation, poverty and unemployment etc. have not been taken into consideration in finalizing the ranking, hence the claim about Pakistan being the cheapest country was unfounded and contrary to ground realities.

“The entire population of Pakistan suffers badly due to across-the-board inflation which has mainly been triggered by the high cost of utilities and the constant rise petroleum prices affecting prices of all the household commodities, adding more miseries to the lives of the poor masses”, he said. 

He pointed out that the World Bank estimated that the poverty ratio in Pakistan stood at 39.3 percent in 2020-21 using the lower-middle-income poverty rate of $3.2 per day income while 40 percent of households suffered from moderate to severe food insecurity.

He noted that CPI inflation in the country has consistently been on a steep rise as, during seven months of FY22, inflation was recorded at a whopping 10.26 percent as compared to 8.19 percent during the same period of FY21. 

He further mentioned that the government recently raised up to Rs12.03 per liter in the prices of petroleum products, taking petrol to a record level of Rs159.86 per liter effective from February 16 and it was really worrisome that they plan to increase petroleum prices further by Rs6 per liter which was going to create a really troublesome situation not only for the masses and the businesses but also the already ailing economy.

“Moreover, a significant increase in the prices of power tariffs is also on the card. Power tariff is likely to increase by Rs6.10 per unit on account of fuel cost adjustment (FCA) for the month of January this year. According to NEPRA, the cost of fuel for electricity generation in Jan’22 increased by 101.5 percent to Rs12.22 per unit on a year-on-year basis. The rising prices of utilities will have a ripple effect on all products and will further heat up inflation”, he warned, adding that it would further erode the purchasing power of the masses. 

Muhammad Idrees was of the opinion that the major impact on inflation comes from imports which are susceptible to Pak Rupee devaluation. The Pakistani rupee lost over 10 percent or around Rs16.68 of its total value during 2021 with the currency really taking the brunt during the second half of the year.

President KCCI further stated that during the first seven months of FY22, exports were recorded at $17.67 billion, while imports were recorded at $46.47 billion, resulting in a trade deficit of $28.8 billion. “Pakistan’s major dependence on imported goods and its inability to diversify export commodities and markets remain major challenges for the country’s economy eating away valuable reserves”, he added.

He hoped that the present government must take the ground realities into consideration and take steps to minimize the hardships being suffered by the already overburdened masses and the businesses who simply cannot afford any further shocks in terms of the rising cost of doing business.

Press Release

Posted on: 2022-02-21T18:23:47+05:00

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