I’m back in Pakistan where the economic picture continues to worsen, as inflation hits 21.53%.
Delve into the detail and you can see the impact of ordinary people. Food prices have risen 32% over the past year, fuel by 11% (despite government subsidies), transport by 25% and health care by 14%. Another petrol and diesel price rise is on the cards.
The new government, meanwhile, is borrowing heavily to maintain subsidies and invest in public services. In the short term, this may dampen down unrest, but it adds to inflationary pressures, and probably merely delays the inevitable economic crunch.
A further problem is the failure of food supply to expand in response to rising prices. According to Mahmood Hasan Khan, food productivity has been stagnant for a decade, with water one of many serious constraints.
Writing in the Daily Times, Rasul Bakhsh Rais sums up the prevailing mood:
The hope that the present elected leadership of the dominant party can address the many challenges facing the country is fast dissipating. There are no alternatives other than chaos, confrontation and even more chaos.
Things are not looking good…
