February 3, 2020: Ministry of Finance says the outcome of stabilization policies, agriculture sector interventions, rigorous monitoring at federal and provincial levels and favourable weather will bring in better results in easing out inflation and sustain the economy towards growth and productivity in the coming days.
According to a press release issued by the Ministry of Finance on Monday, adverse effects of pre-monsoon rains on wheat crop, disruption of supply chain of essential items due to harsh winters, delay in harvest and arrival of crop in the market and lower production of vegetables led to higher food inflation.
But the change of weather and better supply of potatoes, tomatoes and onions should result in smooth supply and decrease price pressure.
Another factor contributing to higher inflation was the global price impact. The commodity prices like palm oil increased by 43.9 percent, Soybean oil by 12.8 percent, crude oil by 16.6 percent in December 2019 over December 2018 also pushed up the domestic prices.
The government has also taken several relief measures to protect the vulnerable from the price-hike.
These measures include provision of subsidy to Utility Stores Corporation on five essential items for which 7 billion rupees have been transferred to Ministry of Industries and Production; 226.5 billion rupees allocated in the budget for low end consumers using less than 300 units of electricity in a month; Prime Minister's Ehsaas program with doubled social safety net allocation of 190 billion rupees from 100 billion rupees; record allocation 152 billion rupees for merged FATA districts; and reduced GST on LPG to 10 percent from 17 percent.