- Finance Ministry asks provinces to monitor prices, discourage hoarding and extend weekly bazaars
ISLAMABAD: With a record devaluation in the local currency, increase in gas/electricity prices and other factors contributing to uncertainty in the market, the Ministry of Finance (MoF) on Wednesday explained reasons behind the expected jump in inflation in the country.
The ministry, as an easy and possible remedy of the situation, has asked the provincial governments to take necessary steps to discourage hoarding and unjustified price hike.
A meeting of National Price Monitoring Committee (NPMC) was held at the Finance Division which was chaired by the finance special secretary. The important meeting was attended by the representatives from all four provinces and the capital territory, as well as from the ministries of industries, law and justice, commerce, national food security and research, planning, development and reforms, inter-provincial coordination, statistics division, Competition Commission of Pakistan (CCP), Pakistan Bureau of Statistics, Utility Stores Corporation and the Federal Board of Revenue.
Justifying the expected inflation, the ministry informed the meeting that there was a lot of flux that characterized the world economy at present, owing to which the emerging markets were facing uncertainty.
“Currencies of the emerging markets recently witnessed a significant devaluation. The federal reserve raised the interest rate which was pushing the dollar relative to other currencies. Oil prices had crossed $85 per barrel and are estimated to hit $90,” the meeting was told.
The ministry urged the provincial governments that they should adhere to strict price monitoring and remain vigilant that no supply disruption of commodities in the markets takes place.
As per the official statement of the ministry, the main reason for the rise was an increase in the international crude oil prices, coupled with a combination of factors including strong domestic demand, which was also visible from pressure on the external and fiscal side, possible lagged impact of recent upward adjustment in gas prices, and exchange rate depreciation.
The meeting was also informed that Consumer Price Index (CPI) increased by 5.60 per cent during Jul-September of the current fiscal year as compared to 3.39 per cent in the same period last year, while the core inflation increased by 8 per cent in September 2018 as compared to 5.4 per cent in the same month last year.
The committee on the occasion observed the rising Sensitive Price Indicator (SPI) trend over the last six weeks. The weekly SPI which monitors the price movement of 53 essential items recorded an increase of 3.65 per cent on October 11. The significant impact came from an increase in gas prices by 15.45 per cent in the previous week.
The meeting also reviewed the prices of essential items in sasta bazaars and open markets and noted that the prices were significantly lower in sasta bazaars as compared to open markets.
The chair emphasized that in case the provincial governments and other stakeholders see any shortage of essential consumer items they should immediately report to the National Price Monitoring Committee (NPMC) so that the federal government could take appropriate measures. He also asked the Competition Commission of Pakistan to remain vigilant that no cartelization takes place.
