Karim Madad

All sectors of society have appreciated the government’s decision of reducing prices of petroleum products, which they said would provide the much-needed relief to inflation-stricken people. Talking to WealthPK, renowned economist Dr Ashfaq Hassan Khan appreciated the government’s decision of lowering the oil prices. He observed that the prices of petroleum products in the international market were also witnessing a declining trend, and the government had taken the right decision of slashing the prices to pass on the relief to people.

Ashfaq Hassan, however, said that this relief would not last long for different reasons. He said that the ongoing IMF programme was in limbo as the lender was demanding that the authorities in Pakistan arrange adequate funding for external repayments before the latest tranche of $1.1 billion was released. He said this deadlock would fuel further financial instability and inflation. He said an agreement on the ninth review of the loan programme could take another two to three weeks.

The economist pointed out that during the current year the budget deficit stood at 4.9%, which would further go up to over 7.5% because of the costly domestic borrowing by the government at a historic interest rate of 21%. Ashfaq Hassan said that due to these reasons, inflation would stay elevated in the near future. He was of the view that this year’s growth rate was expected at zero per cent due to economic slowdown. “All these factors are eroding the purchasing power of common people.”

He said Pakistani rupee was shedding its value against the US dollar more consistently, fuelling inflation. The renowned economist observed that the forthcoming federal budget would contain no relief for the citizens. He noted that contractionary fiscal and monetary policies were squeezing the economic space for the populace. Meanwhile, in a media statement, coordinator to Federal Tax Ombudsman and Chairman of Kyrgyzstan Trade House, Meher Kashif Younis hailed the government’s decision to slash prices of petroleum products, and hoped it would put a positive impact on the national economy and help reduce inflation.

He said reduced petroleum prices would lower transportation costs, leading to a reduction in prices of daily use items. He also appreciated the government’s decision of importing crude oil from Russia. Meanwhile, talking to WealthPK, renowned businessman Shahzad Ali Malik hailed the reduction in oil prices, saying it would bring down inflation, cut cost of production and provide impetus to industry.

He said the government had taken the decision to pass on the impact of reduced oil prices at the international level to the people. He also hailed the continuation of ban on import of luxury goods. He was of the view that reduced petroleum prices, particularly a healthy cut in the price of diesel, would lower transportation costs of shipping companies. He said it will improve profit margins of the companies and potentially reduce the prices of goods and services, benefiting people. He said petroleum prices had a significant influence on inflation. “When petroleum prices decrease, they help alleviate inflationary pressures. A big reduction in the price of diesel would certainly lower costs incurred on transporting goods,” he said.

Credit: Independent News Pakistan-WealthPk