The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) warns the government that inflation above 6% is dangerous for Pakistan’s economy.
In a recent statement, FPCCI President Mian Anjum Nisar said that Pakistan inflation boosted over 9% in September which is against the stable annual inflation rate of 1.2% across the world.
He requested the government to put the economy on a balanced and sustainable growth level. He also added that low export, limited foreign exchange reserves, and higher food inflation remain the major challenges for the economy.
Nisar said that there is a consensus that a low inflation rate helps economic activities, while high inflation hurts economic growth.
The high inflation environment affects the decision making of all economic agents like investors, savers, consumers, and producers as they remain uncertain about the expected payoffs from their decisions,
Moreover, persistent high inflation also causes erosion of the value of the local currency in terms of foreign currencies. Such uncertainties, in turn, have adverse implications for economic activities.”
The FPCCI president stressed the need to build on gains made on the ‘ease of doing business front, as promised by the PM.
Terming inflation a serious threat to the economy, he urged the government to come up with out-of-the-box solutions to expedite economic activities in the country.
The FPCCI president also added that regular increase in oil, gas, power rates and rupee devaluation was posing threat to all sectors besides.
The report added that the FPCCI president further briefed in his statement that over the past three months prices of fresh vegetables, fruits, and meat have increased massively. Whereas the average inflation during January witnessed 12-year high at 14.6% this year.
He said the IMF loan has had devastating effects on the economy, as with more taxes and increased rates of utilities, the cost of production has further increased, rendering Pakistani exports uncompetitive in the global market.