By Abdul Wajid Khan ISLAMABAD, Feb. 11 (INP-Wealthpk) The government is taking policy initiatives, administrative actions and relief measures to control inflationary pressures in the country, said a written brief of the Ministry of Finance. According to the brief, a copy of which is available with INP-WealthPk, all regional countries are experiencing inflationary pressures due to increase in the global commodity prices and disruption in supply chain in the wake of COVID-19 pandemic. Since Pakistan is a net importer of food and oil items, the upsurge in their prices and disruptions in the supply chain have had impact on their prices in Pakistan. The widening trade deficit is caused by the growing import volume of energy and non-energy commodities, rising trend of global commodity prices, COVID-19 vaccines, food and metals. As the economy is in the recovery phase, growing economy and exports expansion requires higher import of capital goods and raw material, which is putting pressure on imports. Due to these factors, the trade balance as well as current account may come under pressure. However, the government is working hard to cope with these challenges by introducing a comprehensive set of economic policies in all sectors of the economy. The government ensures that the growth momentum remains intact along with the price stability and facilitation for the poor segments of the society, said the brief. It added that the price of sugar in the international market had increased by 40% to $420/MT on Oct. 21 from $300/MT on Oct. 20. The price of palm oil soared by 59.6% to $1307/MT in Oct. 2021 from $819/MT in Oct. 20. Similarly, the price of soybean oil increased 62.1% to $1483/MT in Oct. 21 from $915/MT in Oct. 20. The price of crude oil jumped to $83.7/barrel in Oct. 21 from $40.5/barrel in Oct. 20 with an increase of around 106.7%. However, it added that in Pakistan during the period between Oct. 20 and Oct. 21, sugar price increased by 3.8% to Rs103.13/kg from Rs99.32/kg, the price of cooking oil increased by 40% to Rs1772/5kg from Rs1265/5kg, the price of wheat flour increased by 16.1% to Rs1,200/20kg from Rs1034/20kg, while the price of petrol increased by 27.1% to 133.38/litre from Rs104.92/litre. Measures to control inflationary impact It is pertinent to mention that according to the Pakistan Bureau of Statistics (PBS), Consumer Price Index (CPI) inflation increased by 11.5% on year-on-year (YoY) basis in November 2021 compared with an increase of 9.2% in the previous month and 8.3% in November 2020. The Asian Development Bank (ADB) in its latest report has forecast higher than estimated inflation in Pakistan and highlighted that “much of the forecast upgrade reflects a higher projection for Pakistan, where adjustments to energy tariffs and higher global commodity prices are expected to exert upward pressure on domestic prices”. However, the Ministry of Finance added that the government was taking several measures to control inflation and was not passing full inflationary pressure on to the domestic consumers. A strategy for reducing profit margin between the wholesale and retail prices of essential items by analysing the value chain is being worked in consultation with the provincial chief secretaries. Under the prime minister’s comprehensive agriculture transformation plan, the government is focusing on a medium and long-term strategy for raising production of essential imported food items including edible oil and pulses, it added. The government is implementing the National Agriculture Emergency Program amounting to Rs277 billion to uplift agriculture and livestock sector on modern lines and to enhance the production level of major and minor crops. The government is also focusing on the targeted subsidy on essential items for the deserving poor class for whom sufficient funds are being provided. Weekly National Price Monitoring Committee (NPMC) is held under the chairmanship of advisor to the prime minister on finance to ensure a smooth supply of essential items and to monitor the prices by provincial and federal organisations. The government is also expanding the network of sasta bazars (cheap markets) and Utility Stores outlets for provision of smooth supply of daily use items. The Competition Commission of Pakistan (CCP) is taking proactive measures to control cartelization and undue profiteering. District price control committees are actively monitoring the prices of essential items to ensure their availability at reasonable prices. A relief package of Rs120 billion has been announced to provide 30% discount on ghee, flour, pulses to 130 million people for the next six months. Budgetary allocation for the current fiscal year for Ehsaas program has been increased by 24% from Rs210 billion to Rs260 billion. Panagahs (shelter homes) for jobless and poor people have been extended across the country. The State Bank of Pakistan (SBP) has further increased 100 basis points in the benchmark policy rate to 9.75% to counter inflationary pressures and to ensure that growth remains sustainable. Curbing the mounting inflation has become a Herculean task for the incumbent government and the measures taken so far have not produced any tangible results. On the other hand, the constantly increasing inflation has been creating difficulties for the layman. So, more concreate measures and coordinated efforts from the central and provincial governments are required to control internal inflation and bring relief to the people.