I had predicted three months back that Rupee will hit to 150
to a dollar before the budget and now according to the Economic indicators I
can say that it is going to hit further increase up to 160 to 165 post budget.
It is yet to see whether the government would try to hold Rupee to at least to
the present value to avoid further fall by using its abilities.
It looks as if the government has decided to allow the fall to fulfil its commitments to IMF for devaluation of rupees. The economic team must know that IMF had its own hidden agenda as this devaluation along with the other strict conditions are going to further black mail our country. This devaluation will create serious impacts over Pak economy. The price hike graphs will jump upward unhindered and inflation will increase further, also the essential imported items will become even more expensive. These pre-conditions of IMF have started giving jolts to our economy and sleepless nights to a common man as more growing price hike will now become a nightmare for the poor masses.
In fact the IMF deal was already done as the indicators of
depleting rupee and new taxes were the part of the conditions but the economic
teams preferred to keep it hidden from the nation due to their ulterior
motives. The new economic team was “brought-in to materialize the IMF demands
and convert it into the form of an agreement for further mortgaging the nation.
The deal of further mortgaging of national assets is done and so we must be
ready for additional burden.
This deal coupled with other economic parameters suggests
that the price hike will be like a bigger tsunami which will bring bigger
monster of price hike and thanks to IMF lovers in Pakistan.
The public was expecting that the government would not
increase the price of petrol as almost every cabinet member had denied any
further increase in petroleum prices. It is fortunate to note that despite
constant denials at all levels the price was increased at the cost of the peace
of mind and happiness of a common man.
The price of petrol was increased by Rs. 9/- before the open IMF deal but it is said that it was also part of the covert deal with IMF. This increase will leave accumulative effects to escalate more price hike and people will come under more economic pressure.
The condition of the IMF to increase the oil prices was met
and is further dreadful to note that the Inflation in Pakistan has now reached
to 9.41% from 8.82% in March only; the highest in last 5 years. It happened
obviously because the government allowed it go higher as the controlling
parameters were allowed to behave freely and additional printing of currency
notes and more internal and external loans attributed in the increase
inflation. The common man has been further burned with massive price hikes in
all commonly used items across the country during Ramadan A view on the common
italics are that Meat sellers increased prices by Rs. 20 -50 per kg, mutton
dealers have increased prices to Rs. 1050 /- from Rs. 950 /-, boneless meat is
now being sold at Rs 620 - 640 from Rs 600/- per kg, chicken dealers are
charging as high as Rs 380 - 390 per kg, whereas in the last week of March, the
chicken meat was being sold between Rs. 310 - 320 per kg.It is a picture of one
item being consumed by the public
Among non-perishable items, flour prices have been raised
twice. Sugar prices have also risen to Rs 70 /- per kg from Rs65 /- per kg. On
the other hand, among vegetables, prices of onion have been increased.
Oil and Ghee Manufacturers also did not hesitate to do theirs
by increasing the price of good quality cooking oil and ghee to Rs200/- per
liter, after a jump of Rs20, as two months back it was being sold at Rs180 per
liter.
Recently the government threw another inflation bomb on
people by increasing the price of petroleum once again as a 12% increase in the
price of petrol and 17% increase in diesel, light diesel and furnace oil has
been announced. It seems as if the government is playing with the sentiments of
people by first relaxing them with false hopes of no petroleum price hike and
then actually making an increase over night. Petrol now costs Rs108 per liter
and diesel costs Rs122.32 per liter.
It is unfortunate to note that this is still not the end of
story as Pakistan is yet to deal with a fiscal budget 2019 ahead in few days and
further taxes and price hikes will bring more burdens on the economy as
indirect and direct taxes are expected to be imposed. The post budget situation
is going to be dreadful for a common man.
The budget deficit is another dangerous factor and how will the government will be able to narrow down the deficit of 38 Kharab (i.e. 3.8 Trillion) and at the same time how the government will be able to do debt servicing.
The present increase in oil prices, decline in exports, rise
in imports, increased price of utilities, debt servicing in the form of
interest and repayments, increased taxes and duties etc. are the biggest
challenges for the Government. Apparently the government has neither shared
such a plan before the parliament nor before the public.
Moreover, the most alarming thing to note is that this new
budget of 2019-20 will be made in the light of the IMF program rather duly
dictated by the IMF. I pray to Almighty Allah to guide our economy handlers to
follow the correct path to pull the country out of the present economic crises.
The dependence on IMF is driving us gradually towards bankruptcy unless we act
wise to avert it. I demand, on behalf of the public, to place the IMF agreement
in the Parliament and no further such agreement should be done without taking
the Parliament into confidence.
The Article was published by The Nation on May 19, 2019. Link to the original article is IMF tsunami bulldozing Pak Rupee
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