THE prime minister on Sunday spoke about his government’s focus on price inflation, saying both headline inflation as measured by the Consumer Price Index and core inflation — the change in the costs of goods and services excluding those from the food and energy sectors — had slowed down in January to below the July 2018 level. “More good news on the economic front,” read his Twitter account. “CPI and core inflation are both now lower than when our government was formed.” This development was then attributed to the economic policies of the current administration as the prime minister stated he had instructed his economic team to remain vigilant and ensure that inflation was under control.

Indeed, the pace of increase in the prices of goods and services has been decelerating for the last four months with CPI and core inflation dropping to their lowest at 5.7pc and 5.4pc in January in more than two years. But it does not mean that the prices of goods and services Pakistanis consumed last month have gone down to below their two-year level. It just means that the prices now appear to be stabilising at a much higher point than the one when the PTI came to power. The overall CPI basket and food prices are estimated by analysts to already have spiked by an average 23pc and 31pc during the last two and a half years. That speaks volumes for the helplessness of the current dispensation in protecting consumers from the impact of rising prices, despite repeated claims to the contrary.

In spite of considerable deceleration in the January inflation rate, CPI has risen by a cumulative 8.3pc in the first seven months of the present fiscal. Many analysts agree that the present trend will be short-lived and headline inflation is likely to begin its upward journey in a month or two under the impact of the recent 17pc increase in the electricity tariffs and petrol prices. The weak response to the unchecked rise in food prices, especially of wheat flour, sugar and vegetables, has compounded the misery of the low-middle-income households that were already facing financial hardship and job losses owing to harsh economic policies and the Covid-19 impact. With food prices going through the roof, housing becoming unaffordable and indirect taxes and energy bills ballooning, a vast majority of households are left with little to pay for their education and healthcare bills. From the moment the government began implementing its economic stabilisation policies, the people knew that improvement would come at a substantial cost to them. But few had imagined they would also have to pay a steep price for poor governance and an ineffectual policy response to inflation. For now the rising prices are testing the economic pain threshold of ordinary people. Soon these might be testing the commitment of the rulers’ vote bank.

Published in Dawn, February 2nd, 2021