essay inflation in pakistan 2023

Essay on Inflation in Pakistan for Students

by Pakiology | Mar 22, 2024 | Essay | 0 comments

In this essay on inflation in Pakistan, we will look at the causes, effects, and solutions to this issue that has been affecting the country for decades. The term ‘inflation’ refers to a sustained rise in the prices of goods and services in an economy. In Pakistan, inflation has been a major concern since the late 1990s, with the Consumer Price Index (CPI) reaching a peak in 2023. We will explore the various factors that have contributed to inflation in Pakistan, its economic effects, and what can be done to address the issue.

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Essay on Inflation Outlines

Causes of inflation in pakistan, effects of inflation, solution to control inflation.

• Introduction

Inflation in Pakistan is caused by several factors, which can be divided into two main categories: domestic and external. The main domestic causes of inflation are an increase in money supply, an increase in government spending, an increase in indirect taxes, and a decrease in economic growth.

The most significant contributor to inflation in Pakistan is an increase in the money supply. When there is too much money chasing after too few goods, prices rise, creating a situation known as demand-pull inflation. An increase in the money supply can be caused by the central bank printing more money or by the government borrowing more money from the public.

In addition, higher government spending can lead to inflation. This occurs when the government prints more money to finance its expenditure or borrows from the public and transfers the cost of this additional spending to businesses and consumers. This leads to higher prices for goods and services. Indirect taxes are another major factor that contributes to inflation in Pakistan. When indirect taxes are increased, prices of goods and services also increase, leading to an overall rise in prices.

Finally, low economic growth can also cause inflation in Pakistan. A weak economy reduces people’s purchasing power, forcing them to buy less, which reduces demand and leads to lower prices. However, when economic growth stalls, businesses are unable to sell their products at the same price as before, leading to a rise in prices.

Overall, inflation in Pakistan is caused by a combination of domestic and external factors. These include an increase in money supply, higher government spending, increases in indirect taxes, and a decrease in economic growth.

The effects of inflation on the economy can be both positive and negative. Inflation erodes the purchasing power of money, meaning that each unit of currency is worth less than it was before. This means that, as the cost of living increases, people can purchase fewer goods and services for the same amount of money. As a result, their standard of living decreases.

Inflation also reduces the real return on investments and savings, which can have a detrimental effect on economic growth. When inflation is high, people prefer to save their money rather than invest in a business or other activities. This reduces the availability of capital and results in slower economic growth.

In addition to decreasing standards of living, inflation can lead to unemployment if companies are not able to increase wages at the same rate as prices rise. This can lead to an increase in poverty, as people struggle to afford necessities. Furthermore, when prices rise faster than wages, it puts pressure on government budgets and can increase public debt.

Inflation can also cause the value of the local currency to depreciate against foreign currencies. This has a direct impact on the cost of imports and makes domestic goods less competitive in international markets. It can also have an indirect impact on exports, as it reduces the competitiveness of local producers in foreign markets.

Inflation is a serious issue in Pakistan, and it needs to be addressed to improve the country’s economic conditions. The following are some of the measures that can be taken to control inflation in Pakistan:

1. Fiscal policy: A strong fiscal policy is necessary for controlling inflation. The government should increase its revenue by implementing taxes on the wealthy and reducing public spending. This will help reduce budget deficits, which will result in lower inflation.

2. Monetary policy: The State Bank of Pakistan should adopt a tighter monetary policy to control inflation. It should raise interest rates so that investors have an incentive to save rather than spend, thus curbing demand-pull inflation.

3. Supply-side measures: There should be an increase in the production of essential commodities and products to meet the demand of consumers. This will help reduce prices and inflation in the long run.

4. Subsidies: The government should provide subsidies to those who are suffering due to the high prices of essential items. This will help them cope with the rising cost of living and ensure that they have access to essential goods and services.

5. Stabilizing exchange rate: A stable exchange rate between foreign currencies and the rupee is necessary for controlling inflation. The State Bank of Pakistan should strive to keep the rupee’s value stable by using currency swaps and other methods.

These measures can go a long way in controlling inflation in Pakistan. By taking these measures, the government can help improve the country’s economic condition and create an environment conducive to investment and growth.

What is inflation in simple words?

Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.

What are the 4 main causes of inflation?

The 4 main causes of inflation are: Demand-pull inflation: when there is an increase in demand for goods and services that outstrip the economy’s ability to produce them. Cost-push inflation: when the cost of production increases, causing companies to raise prices to maintain their profit margins. Built-in inflation: when businesses expect prices to rise and build that expectation into their prices, causing a self-fulfilling cycle of inflation. Imported inflation: when the cost of imported goods increases, leading to higher prices for consumers.

What are the 5 main causes of inflation?

The 4 main causes of inflation are: 1. Demand-pull inflation 2. Cost-push inflation 3. Built-in inflation 4. Imported inflation 5. Monetary inflation

What is inflation introduction?

Inflation is a phenomenon that has been observed throughout history. It refers to the sustained increase in the general price level of goods and services in an economy over a period of time.

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Inflation in Pakistan could average 33% in H1 2023, says Moody's economist

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Pakistan Inflation Rate

Inflation rate in pakistan fell for the third consecutive month to 20.7% in march 2024, the lowest since may 2022, from 23.1% in february. the decline in inflation is mainly due to a slowdown in price increase of food & non-alcoholic beverages (17.2% vs 18.2%), clothing & footwear (16.1% vs 20.2%), transportation (11.2% vs 15%) and restaurants & hotels (18.9% vs 22.4%). on the other hand, housing & utilities costs accelerated slightly (36.6% vs 36.1%). on a monthly basis, prices increased by 1.7%, following no changes in february. source: pakistan bureau of statistics, inflation rate in pakistan decreased to 20.70 percent in march from 23.06 percent in february of 2024. inflation rate in pakistan averaged 8.42 percent from 1957 until 2024, reaching an all time high of 37.97 percent in may of 2023 and a record low of -10.32 percent in february of 1959. this page provides the latest reported value for - pakistan inflation rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. pakistan inflation rate - data, historical chart, forecasts and calendar of releases - was last updated on april of 2024., inflation rate in pakistan decreased to 20.70 percent in march from 23.06 percent in february of 2024. inflation rate in pakistan is expected to be 18.00 percent by the end of this quarter, according to trading economics global macro models and analysts expectations. in the long-term, the pakistan inflation rate is projected to trend around 10.00 percent in 2025 and 8.00 percent in 2026, according to our econometric models.,   markets,   gdp,   labour,   prices,   money,   trade,   government,   business,   consumer,   taxes,   health,   climate.

World Bank: Pakistan’s Economy Slows Down While Inflation Rises Amid Catastrophic Floods

ISLAMABAD, October 6, 2022 - Pakistan’s economy is expected to grow by only 2 percent in the current fiscal year ending June 2023. According to the World Bank’s October 2022 Pakistan Development Update: Inflation and the Poor , the slower growth will reflect damages and disruptions caused by catastrophic floods, a tight monetary stance, high inflation, and a less conducive global environment. Recovery will be gradual, with real GDP growth projected to reach 3.2 percent in fiscal year 2024.

Poverty in the hardest-hit regions will likely worsen in the context of the recent flooding. Preliminary estimates suggest that – without decisive relief and recovery efforts to help the poor – the national poverty rate may increase by 2.5 to 4 percentage points, pushing between 5.8 and 9 million people into poverty. Macroeconomic risks also remain high as Pakistan faces challenges associated with a large current account deficit, high public debt, and lower demand from its traditional export markets amid subdued global growth.

“ The recent floods are expected to have a substantial negative impact on Pakistan’s economy and on the poor, mostly through the disruption of agricultural production,” said Najy Benhassine, the World Bank’s Country Director for Pakistan . “The Government must strike a balance in meeting extensive relief and recovery needs, while staying on track with overdue macroeconomic reforms. It will be more important than ever to carefully target relief to the poor, constrain the fiscal deficit within sustainable limits, maintain a tight monetary policy stance, ensure continued exchange rate flexibility, and make progress on critical structural reforms, especially those in the energy sector.”

This Update also outlines potential strategies to manage the impacts of high inflation. Inflation in Pakistan is expected to reach around 23 percent in FY23, reflecting flood-related disruptions to the supply of food and other goods, higher energy prices, and difficult external conditions, including tighter global monetary conditions. The Update shows that the high inflation will disproportionately impact the poor.

“While relief measures are needed to cushion the impacts of flooding, it will be critical to ensure that these are targeted towards those most in need,” said Derek H. C. Chen, author of the report . “Pakistan has previously resorted to energy subsidies, but our analysis shows that such measures disproportionately benefit better-off households, while imposing unsustainable fiscal costs. Going forward, the priority should be to tame inflation through sound macroeconomic policies. These should be accompanied by measures to provide targeted relief to those hit hardest by rising prices, including through expanded social protection programs, and to address the distortions that discourage trade and productivity.”

The Pakistan Development Update is a companion piece to the South Asia Economic Focus, a twice-a-year World Bank report that examines economic developments and prospects in the South Asia region and analyzes policy challenges faced by countries. The Fall 2022 edition titled Coping with Shocks: Migration and the Road to Resilience, launched on October 6, 2022, shows that growth in South Asia is dampening due to recent major global and regional shocks including rising inflation; the impacts of the global food, fertilizer and fuel shortages; the economic crisis in Sri Lanka; and the catastrophic floods in Pakistan. It also analyzes the impacts of COVID-19 on migration and the role labor mobility and migration can play in facilitating economic development.

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IMF forecasts Pakistan’s economy to slump, inflation to rise

IMF says Pakistan’s economy will grow just 0.5 percent this year, down from 6 percent in 2022.

The International Monetary Fund has slashed the growth outlook for cash-strapped Pakistan, forecasting the South Asian country’s fragile economy will grow just 0.5 percent this year, down from 6 percent in 2022.

The latest data on Pakistan’s ailing economy was released by the IMF on Tuesday, when it unveiled its World Economic Outlook report in Washington, DC.

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The IMF also forecast 27 percent inflation for this year for the country of more than 230 million people.

The global lender warned that unemployment would continue to rise in Pakistan which is struggling to avoid a default as it recovers from the destruction caused by last summer’s floods, which killed 1,739 people and caused $30bn in damages.

The coalition government of Pakistan’s Prime Minister Shahbaz Sharif is in talks with the IMF to receive a key tranche of a $6bn bailout package signed in 2019 by Sharif’s predecessor Imran Khan.

In recent weeks, the government slashed subsidies and raised taxes to comply with the bailout terms and secure the release of the $1.2bn portion of the deal that has been stalled since December. But those measures resulted in increases in the price of food , gas and power.

Sharif’s government has become unpopular because of higher food costs, although he has blamed Khan, who is now the country’s opposition leader, for mismanaging the economy when he was in power.

Khan was deposed  last April in a no-confidence vote in parliament, and since then he has been leading rallies in a failed attempt to force Sharif to agree to an early election, which is scheduled for later this year.

Inflation, IMF and investment — did Pakistan learn anything from 2023?

It is becoming increasingly difficult to keep track of all that ails Pakistan. 2023 was essentially a year where crises across the political, economic, and security domains coalesced in a way that few could have imagined. And while the near- and long-term implications of the collapse post-2008 democratic order are yet to fully play out, the economic crisis has reached a point where even urban upper-class citizens are beginning to feel the pinch.

Here are the key events that perhaps sum up the agony of 2023.

Inflation — a monster that refuses to be tamed

Pakistani media is known to use the “mehengai ka toofan” [storm of inflation] line to grasp the attention of inattentive eyeballs, but 2023 was truly the year when inflation destroyed the remaining confidence across households. The depreciating currency, rising energy prices, and the second- and third-order effects on yet another ongoing IMF programme ensured that inflation continued to wreak havoc across large swathes of the economy.

All this happened while the central bank remained committed to its medium-term inflationary target, a testament to the institution’s delusions. Others also joined in on the action to argue that the base effect would soon lead to lower inflation.

But this was not the case and consumer prices rose by nearly 30 per cent during the calendar year, according to the consumer price index published by the Pakistan Bureau of Statistics.

For those looking for a positive spin, Pakistan ranked first in the subcontinent when it comes to inflation — Bangladesh came in second with 10pc, while India finished dead last with a 6pc increase in its consumer price index during the same period.

Dar’s staring contest with the IMF ends in defeat

The House of Sharif’s return and entry into the good books of those that matter most is the stuff of legends. But even more legendary was the return of Ishaq Dar to the finance ministry, with Mr Dar reminding those who still cared about the economy that he has a 25+ years of experience in dealing with the IMF (that this experience itself ought to be a disqualification from the job of finance minister is a topic for another column).

While the dollar was initially scared of Mr Dar’s return to Islamabad, and he set in motion another attempt to maintain a peg for the rupee (leading others to make their own peg of choice to ease the pain), 2023 was the year in which Daronomics was defeated.

The IMF ultimately won the staring contest, but Dar’s ghosts continue to linger on in Islamabad and Rawalpindi.

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An obsession with a stronger rupee makes sense, given that it creates some space to control inflation, especially given the country’s energy import needs. But such measures provide only short-term relief, as evidenced numerous times in the past.

Will 2024 lead Pakistan’s policymakers to choose a different path? This remains to be seen, but given that the House of Sharif is apparently the frontrunner in the upcoming elections, another futile attempt at Daronomics cannot be ruled out.

SIFC — the solution for all ills, future and current

Pakistan’s elite need four-letter acronyms to convey that the “taqdeer” [destiny] of the country is about to change. While they typically spin these acronyms as changing the destiny of the country for the better, the outcome is often exactly the opposite.

2023 was the year when the red carpet was rolled out for the Special Investment Facilitation Council (SIFC), focusing on everything including mining and agriculture . Pakistanis at home and abroad were beseeched to not lose hope by powerful individuals who vowed to make Pakistan a G20 economy by 2030. Roadshows were conducted and investments were sought through the SIFC in a bid to turnaround the economic prospects of the country.

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In addition, big targets were set for growing exports, including a $100 billion IT export target. Shortly after announcing the target, however, internet services were disrupted in the country to prevent a virtual jalsa by a party that is struggling to even retain its electoral symbol.

Since the economy is all about data, here is a fun-fact for you: Pakistan attracted $2.1bn in foreign direct investment inflows in both 2022 and 2023, despite all the focus on the SIFC and the billions that were supposedly coming in from the Gulf. Maybe 2024 promises more in FDI as the SIFC mechanism matures?

As the saying goes “umeed pe dunya qayam hai” [the world survives on hope].

What comes next in 2024?

Predicting things is a near-impossible task in Pakistan. After all, back in 2021, many were planning for a 10-year uninterrupted period of rule, only to face unimaginable repression (that is condemnable and ought not to be tolerated) in 2023.

But what is clear is that three key risks will continue to cast a dark shadow over Pakistan and its economy — inflation, instability, and indecision.

With the country needing another IMF programme soon after the current one ends, the inflationary cycle is far from over. There are many who expect that this will not be the case, but the austerity-driven policies that the IMF will impose, and the additional pricing adjustment that a new programme will demand, make it likely that the upward trajectory of prices will continue in the near-term.

With elections coming up fast, it is difficult to know exactly what the new ruling dispensation in Pakistan will look and feel like. But the ongoing crackdown against Imran Khan and those who have courageously remained loyal to him suggests that things are unlikely to settle in the near-term. If the electoral process is handled in a ham-fisted way, the illusion of stability created through repression may be swept away, leading to another round of confrontation that is currently not being baked into most scenarios being discussed. The hybrid regime seems to have survived for now, but it is perhaps the weakest it has ever been.

Given Imran’s popularity, the economic pain felt by citizens across classes, and the seething anger among a younger generation that is refusing to bend the knee to the status quo, a new ruling dispensation will have, in the best of circumstances, very limited space to embark on a reform agenda. As such, more indecision may be around the corner, meaning that 2023 may look and feel like nothing by the time December 2024 comes along.

For the betterment of Pakistan and its beleaguered citizens, one can only hope and pray that these risks do not materialise.

Header image via Shutterstock

The writer is the director of the Pakistan Initiative at the Atlantic Council’s South Asia Center and host of the podcast Pakistonomy.

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Economic Fragility

Democratic backsliding and political chaos, security challenges and foreign policy, pakistan in 2023 : a year of desperate survival.

Mariam Mufti is an Associate Professor of Political Science at the University of Waterloo, Canada.

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Mariam Mufti; Pakistan in 2023 : A Year of Desperate Survival . Asian Survey 1 April 2024; 64 (2): 211–221. doi: https://doi.org/10.1525/as.2024.64.2.211

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Economic uncertainty, political instability, and security concerns marked 2023 as a year where the country desperately tried to survive. The year began with Pakistan on the brink of sovereign default, with depleting foreign reserves and soaring inflation. Although successful negotiations with the IMF averted economic catastrophe, political crisis seemed to replace the country’s economic woes. In the second half of 2023, following Imran Khan’s temporary arrest on May 9, political confrontation between the military and Pakistan Tehrik-e-Insaaf resulted in the worst democratic backsliding witnessed in recent years. Although Pakistan heads to the polls in the new year, it appears to be saddled by the weight of the political status quo.

In 2022, Pakistan teetered on the brink of economic collapse and political uncertainty. Mufti (2023) reported that misplaced economic priorities and a politics of confrontation between the ruling party and the opposition resulted in a year replete with crises. The year closed with Pakistan beleaguered by economic woes, calamitous flooding, never-ending political turmoil, and the resurgence of violence by the home-grown terrorist network Tehrik-e-Taliban Pakistan (TTP).

Addressing these political and economic crises should have been the agenda for 2023. However, instead of showcasing lessons learned and a commitment to political and economic reform, 2023 proved to be a year of desperate survival and maintenance of the status quo. The everyday lives of Pakistani citizens saw no improvement as they grappled with the escalating cost of living, a depreciating currency, diminishing incomes, and inadequate service provision. The effects of another structural adjustment demanded by the International Monetary Fund (IMF) devastated consumer confidence. On the political front, the systematic dismantling of the Pakistan Tehrik-e-Insaaf (PTI) after its fall from the military’s good graces resulted in brazen attempts by the Pakistan Democratic Movement (PDM)—a 13-party coalition including the PML-N (Pakistan Muslim League-Nawaz) and PPP (Pakistan People’s Party)—to pave the way for Nawaz Sharif to make a political comeback as Pakistan heads to the polls in February 2024.

Continuing from 2022, the risk of sovereign default remained ever present in 2023, as Pakistan became increasingly dependent on aid for its economic survival (the United States Institute of Peace reports that Pakistan owes its creditors USD 77.5 billion over the next three years— Rana 2023a ), and foreign exchange reserves plunged to new lows.

In the first half of 2023 economic conditions worsened in quick succession. The State Bank of Pakistan raised its monetary policy rate to 17%, the highest since 1997, to rein in inflation. This was followed by a 15% devaluation of the Pakistani rupee against the US dollar, and foreign exchange reserves fell to USD 3.7 billion, barely enough to cover two weeks’ worth of imports. The government’s stubborn refusal to carry out the fiscal reforms required to unlock a bailout of the economy delayed negotiations with the IMF. These developments signaled the risk of imminent default and led to a downgrading of Pakistan’s credit rating by US-based credit agency Moody’s ( Sarfaraz 2023 ).

As negotiations with the IMF kept stalling and inflation hit a 50-year high at 37%, Pakistan’s only saving grace was the willingness of China, Saudi Arabia, and the UAE to step in at critical moments to extend loans amounting to nearly USD 8 billion over the short period from March through June ( Sarfaraz 2023 ). China also agreed to roll over and refinance USD 7 billion, easing debt repayment obligations ( Rana 2023b ). On the one hand, these pledges of external assistance from bilateral creditors kept Pakistan’s economy afloat and provided financial assurance to other lenders, like the IMF. On the other hand, two authoritarian regimes became the greatest contributors to Pakistan’s external debt. This is a matter of grave concern because it is likely to limit Pakistan’s agency and ability to maintain a credible foreign policy with Western democracies, particularly the United States, whose support is critical in negotiating with the IMF.

In May, the IMF reluctantly began the ninth review of its program in Pakistan and immediately demanded fiscal reforms in exchange for a new nine-month program with a USD 3 billion Standby Agreement as an emergency measure to stabilize the economy ( Sarfaraz 2023 ). Backed into a corner and recognizing the urgency of the situation, prime minister Shehbaz Sharif agreed to all the IMF requirements—increasing taxes, removing ill-advised subsidies on fuel and food prices, and removing the artificial peg of the Pakistani rupee to the US dollar, resulting in a freefall of the rupee. The talks concluded in July, just in time to help avert economic crisis with the release of USD 3 billion; and in November, when the IMF review was concluded, another USD 700 million was released from the next tranche of money, to be made available in January 2024.

Although the IMF bailout paved a path to economic recovery in the short term, the country remains poised for default in FY2024 ( Khurram Hussain 2023 ). Foreign exchange reserves remain dangerously low, and the balance-of-payments crisis is likely to continue as the rupee depreciates, adding to inflation. Policymakers will need to confront several other challenges as well. First, the federal government’s borrowing from commercial banks quadrupled from July to November compared to the same time in 2022, even though it is exceeding its tax revenue generation targets. The cost of domestic and external debt servicing and large spending on the salaries and pensions of government employees is proving unsustainable ( Azim 2023 ). According to Reuters, Pakistan’s debt-servicing-to-government-revenue ratio is 41% ( Sarfaraz 2023 ). Pakistan must expand its tax revenue base, but the vested interests of the political elite continue to hinder the taxation of real estate, agriculture, and some industrial sectors. Second, Pakistan is an import-based economy and is likely to remain vulnerable to the increase in commodity prices due to the continuation of geopolitical conflict in Ukraine and the Middle East.

The dismal economic climate due to stringent import restrictions to control dollar outflows and consistently high inflation increased the cost of doing business and directly hurt the consumer ( Subohi 2023 ). Many import-dependent businesses shut down due to the shortage of essential commodities, and other industrial sectors rapidly lost their competitive advantage in the international market. The World Bank reported that in 2023, 39% of the population fell below the poverty line ( Sarfaraz 2023 ). The Global Hunger Index (2023) ranked Pakistan 102nd out of 125 countries, with 8.5 million people facing acute food insecurity. Consumer prices rose by nearly 30%, according to the consumer price index published by Pakistan’s Bureau of Statistics ( Yunus 2023 ). This, coupled with the unbearable burden of electricity and gas bills and the depreciating currency, decimated purchasing power in 2023.

Yunus attributes Pakistan’s economic woes to the three I’s: inflation, IMF, and indecision. Certainly, political stability and the desire for reform are prerequisites for economic recovery. The current interim government does not have the legal mandate to negotiate a new IMF program. Hence, elections must be held on schedule, in February 2024, so that Pakistan is not caught in another standoff with the IMF. Moreover, Pakistani leaders need to attract foreign direct investment for a much-needed boost to the economy. The newly formed Special Investment Facilitation Council(SIFC), which includes the prime minister and the army chief, aims to bolster investor confidence. However, it remains to be seen whether the newly elected dispensation will be able to overcome bureaucratic inefficiency, an unfavourable business environment, and an inefficient energy sector—and most of all, curry favor with the dominant military establishment, whose priorities dominate the council.

The previous year had ended in a political stalemate between the ruling coalition (led by the PML-N) and the PTI, with both sides determined to undercut each other using the military and/or the judiciary. This politics of confrontation continued into 2023.

The PDM’s 13-party coalition, led by prime minister Shehbaz Sharif, ended its tenure in August 2023 on an unexceptional note. Its record on governance and economic mismanagement failed to convince the electorate of the coalition’s suitability as an alternative to the PTI ( Lodhi 2023 ). But it had managed to oust the PTI by a no-confidence motion in 2022 and subsequently stymied any demand to hold elections. The PDM also presided over a devastating backsliding of democracy by being a willing collaborator of the military as it bulldozed legislation through parliament, without deliberation or debate, that expanded the military’s power to intervene in politics. The Official Secrets Act was amended to empower the Inter-Services Intelligence agency to conduct raids on the mere suspicion of an offense. The Pakistan Army (Amendment) Act of 2023 criminalized criticism of the military. It also authorized the army to participate in “national development” and “advancement of national strategic interest” ( Afzal 2023b ) as seen in the creation of the SIFC. Prior to the dissolution of the National Assembly, the PDM succeeded in amending the Elections Act of 2017, limiting the disqualification of lawmakers to five years, with retrospective effect. This paved the way for Nawaz Sharif    ’s political comeback, potentially overturning his disqualification in 2016 from holding elected office on account of corruption ( Asad 2023 ).

The most critical turning point of 2023 was the irreparable breakdown of Imran Khan’s relationship with his former benefactors in the military establishment. On May 9 he was arrested outside the Islamabad High Court by paramilitary troops after a hearing pertaining to the Toshakhana case. Khan was accused of not disclosing gifts received from other heads of state and deposited in the Toshakhana, a department of the Cabinet division. It was alleged that Khan had sold these gifts and not declared the revenue earned. The arrest sparked violent protests across Pakistan by PTI supporters, who vandalized military headquarters in Rawalpindi, stormed the corps commander’s residence in Lahore, and targeted government buildings. At least eight people died in clashes with the police. Access to mobile internet services and social media was shut off for several days ( Afzal 2023a ). The protests were significant because of what they asserted, which was that the military establishment was corrupt and complicit in the prolonged stalemate over delayed elections ( Sattar 2023 ). Infuriated by this attack on its carefully honed image of invincibility, the military cracked down on the PTI, rounding up its leaders and activists, and reportedly also harassing their family members. On May 11 Khan was released on bail, but the die had been cast, as Khan’s allegations against the military, and in particular army chief general Asim Munir, gained traction.

Khan’s confrontation with the military has been described as an “existential, zero-sum fight between the country’s most popular politician and the most powerful institution” ( Afzal 2023b ). However, given the current state of affairs, clearly the military has the upper hand in this fight. To dismantle the PTI it has used every strategy in its tried and tested playbook for wayward and recalcitrant members of the political elite.

First, the military and intelligence agencies have repeatedly incarcerated and harassed PTI leaders and activists to sow the seeds of dissent and weaken morale. For example, Shireen Mazari, Fawad Chaudhry (former information minister), and Asad Umar, all party stalwarts, stepped down from party leadership positions ( Afzal 2023a ). Shah Mehmood Qureishi (former foreign minister) remains in jail, awaiting trial under the Official Secrets Act.

Second, PTI party members have been coerced to defect to other political parties or to step away from politics altogether. While defections and party-switching are common in Pakistani politics prior to an election, the speed with which the party has been hollowed out is unprecedented ( Afzal 2023a ).

Third, new parties have been cobbled together under the leadership of disillusioned PTI stalwarts as alternatives to the PTI. The first of these, the Istekham-i-Pakistan Party (the name ironically alludes to steadiness), is led by Jahangir Tareen, who led a forward bloc of defectors against Imran Khan during the no-confidence motion in 2022. The second is a party faction, PTI-Parliamentarians, led by the former chief minister of Khyber Pakhtunkhwa, Pervez Khattak. Many of the defectors from PTI were encouraged by the so-called establishment—shorthand for the military-dominated state—to join these new parties (Siddiqui 2023).

Fourth, the incumbent government has been co-opted to undermine the PTI through new legislation. PML-N and PPP leaders of the PDM displayed their short-sightedness by readily forgetting the democratic interregnum of the 1990s, when they had been on the receiving end of the military’s tactic of pitting political parties against each other. Not only did the PDM short-circuit the constitution by not holding elections within 90 days after the PTI dissolved the provincial assemblies in Khyber Pakhtunkhwa and Punjab, they also abetted the military by amending key legislation that is now being used in cases against PTI chief Imran Khan. Furthermore, the incumbent government has been a willing spectator of the systemic poll rigging that is tipping the scales in PML-N’s favor ( Zahid Hussain 2023 ).

Fifth, the party leader was disqualified. In August 2023, Khan was re-arrested for inappropriately selling state gifts (in the Toshakhana scandal). Although the case was suspended, he was kept in judicial remand in the cipher case ( Afzal 2023b ). Khan was alleged to have mishandled a cipher from the US State Department, holding on to it in case it might become politically expedient to cite it as evidence of a US conspiracy to oust him from office. This was deemed a violation of the recently amended Official Secrets Act of 2023. And in addition to these two, there are 180 other cases pending against Khan, which have led to his disqualification from running for election in 2024 ( Afzal 2023b ).

Sixth, to counteract Khan’s popularity and cult of personality among voters, a “near-complete blackout” of the former prime minister in the media has been imposed ( Irfan 2023 ). The most egregious example of this is when ARY, a private news channel, blurred out his image during a live broadcast of the party leader’s meeting with IMF officials. Other attempts to silence Khan have included the suspension of YouTube and using PEMRA (the Pakistan Electronic Media Regulatory Authority) to impose bans on the live coverage of Khan’s speeches.

Seventh, the polls are being rigged. In the run-up to the 2024 elections, returning officers are disqualifying PTI candidates, citing arbitrary criteria. PTI party rallies are also being disrupted, but much to the chagrin of authorities PTI is defying the restrictions by finding creative ways of using social media and AI to organize virtual gatherings ( Zahid Hussain 2023 ). The most brazen attempt at tipping the scales in favor of the incumbents is a rule preventing PTI from using the cricket bat as its election symbol on the ballot.

Since the dissolution of the National Assembly in August, a caretaker government under the premiership of a long-standing military supporter, Anwarul Haq Kakar, was sworn in. The tenure of the caretaker government has been prolonged beyond the constitutionally mandated 90 days through the Election Commission of Pakistan being obligated by the outgoing PDM government to conduct a fresh delimitation of constituencies under the latest population census ( Lodhi 2023 ). During this time, the military has carefully avoided direct intervention in politics, but it has clearly been in control of policymaking in both economic and foreign policy realms. However, Siddiqui (2023) argues that despite having the upper hand, the military has failed to control the narrative and respond effectively to the challenges it faced. It began the year unsure and under-confident in general Asim Muneer’s leadership as chief of army staff. Its initial defensiveness in the face of Khan’s bold attacks on its reputation and institutional integrity gave way after May 9 to unchecked aggression. This weakened the military’s public image as it struggled to maintain a consistent narrative about the ineptitude of civilian politicians.

Throughout 2023, the judiciary was called on to arbitrate political disputes. However, the most notable development was the transition from Chief Justice Bandial to Chief Justice Issa in September. Issa consciously avoided involving the Supreme Court in the political turmoil gripping the country. Nonetheless, the Supreme Court did strike down the army’s attempt to try civilians in military courts in the wake of the May 9 protests. Later in the year, this decision was overturned by the same court, allowing military trials of Imran Khan’s supporters.

This year was also characterized by the Human Rights Commission of Pakistan (2023) as a bad year for media independence and minority rights. First, in 2023 Pakistan was 150th out of 180 countries on the World Press Freedom Index. This ranking took into account the high rate of impunity for the perpetrators of violence against journalists in Pakistan ( Engineer 2024 ). The military establishment also muzzled press freedom by obsessively controlling the media. Second, minorities, particularly Christians, were brutalized in Jaranwala Tehsil as their homes were burned down by a mob over blasphemy allegations. This incident once again highlighted the need to review how blasphemy laws have been misused to accuse minorities, often falsely, in instances of vigilante justice. The investigation into the Jaranwala case revealed a broader campaign of hatred against Christians by local political leaders. It also showed the state’s failure to uphold the most fundamental constitutional right of all Pakistani citizens: the protection of life and property irrespective of faith, caste, or status.

As the year closed, yet another tragedy unfolded as the federal caretaker government used brute force to disperse demonstrators who had converged on Islamabad to protest the enforced disappearances and extrajudicial killings in Balochistan. More than 200 were taken into custody, and others were subjected to tear gas, water cannons, and police batons ( Ng 2023 ). Most of the protestors were Baloch women, who had marched to Islamabad to draw attention to the forced disappearances, extrajudicial killing, arbitrary detention, and torture of their male relatives. The hostile response of the federal government, and Prime Minister Kakar’s characterization of the protestors as relatives of those who are fighting against the state, instead of showing empathy, is being seen as state complicity in the discriminatory and unconstitutional treatment of the Baloch ( Ahmad Fraz Khan 2024 ).

China proved itself to be Pakistan’s all-weather ally and friend in times of need as it extended loans to help keep Pakistan’s economy afloat. Moving forward, Pakistan has reaffirmed its commitment to the Chinese Belt and Road Initiative and is hopeful that China will support Pakistan’s bid for membership in BRICS, the group of emerging economies whose founding members were Brazil, Russia, India, and China ( Sattar 2023 ).

In contrast, Pakistan’s relations with India and Afghanistan deteriorated throughout 2023. Relations with Afghanistan have been dominated by the Taliban government, which is accused of sheltering the Pakistani Taliban (TTP) and allowing it to act with complete impunity as it targets the Pakistani state. In November 2022, the TTP called for the end of a ceasefire with Pakistan, resulting in a spate of cross-border fire. Since then, there has been an unprecedented surge in terrorist attacks and suicide bombings. According to the Pakistan Institute for Conflict and Security Studies, 2023 witnessed at least 645 militant attacks, which killed 976 people and injured 1,354. The average number of militant attacks jumped from 32 per month in 2022 to 54 per month in 2023. Khyber Pakhtunkhwa and Balochistan have borne the brunt of this terrorist violence, with the bloodiest attack being on a mosque in Peshawar, claiming the lives of 84 people ( Abdullah Khan 2024 ).

Prime Minister Kakar has linked the increase in TTP violence to the Taliban takeover of Afghanistan in 2021. He has since mounted a pressure campaign to coerce the Taliban to revoke its support of the TTP ( Mir 2023 ). The linchpin of this campaign has been the Illegal Foreigners Repatriation Plan, which impacts nearly two million undocumented Afghans residing in Pakistan. The human toll has been incalculable. For many of these individuals Pakistan had become home, and their exile to Afghanistan has ripped them from the lives they had so carefully built ( Rehman and Afridi 2023 ).

Another measure the Pakistani government threatens to use is to leverage landlocked Afghanistan’s ability to trade. According to Mir (2023) , border crossings with Pakistan constitute 40% of Afghanistan’s customs revenue and 60% of the Taliban government’s revenue. Taliban leaders seem to be frustrated with the moves made by the Pakistani government, yet its inaction on the issue of the TTP is indicative of internal divisions within the Taliban. One faction believes in protecting the TTP’s jihadist campaign against Pakistan, while another faction, which is committed to state-building, views Pakistan’s actions as a deliberate conspiracy to undermine the Taliban government.

Pakistan’s relationship with India was at an all-time low, as seen in the recent hostile treatment of the Pakistani team as it competed in the Cricket World Cup, which was hosted by India. Sattar (2023) reports a surge in nationalism on both sides, which, coupled with a downturn in economic and cultural exchanges, exacerbates the diplomatic challenges facing these antagonistic neighbors.

Lastly, Pakistan’s relationship with the United States also remained fractured and distant. The US withdrawal from Afghanistan in 2021 changed US–Pakistan relations. Although both countries are aligned in their fear of Afghanistan becoming a safe haven for militant religious organizations, they have been unable to leverage this into a positive working relationship. The Biden administration has continued to limit its engagement with Pakistan. It is surprising that the US has not spoken up against democratic backsliding in Pakistan ( Afzal 2023a ).

Pakistan heads to the polls in the new year. However, the national mood is one of despair over a dire economic situation with no end in sight. Moreover, the political chaos in the country is a repeat of what has been experienced in the past; the only difference is that the military is more experienced in exercising its influence indirectly, holding the development of democratic norms and institutions hostage to its agenda.

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The inflation crisis in Pakistan

I am writing to express my deep concern regarding the current inflation crisis in Pakistan. Septem­ber 2023 saw a Consumer Price In­dex (CPI) inflation rate of 27.4%, the highest in decades. This stag­gering figure signifies a substantial increase in the cost of goods and services over the past year, with an average rise of 27.4%.

The dire consequences of this high inflation rate are severely im­pacting the lives of ordinary citi­zens. Many people are finding it increasingly challenging to afford basic necessities such as food. Ad­ditionally, this inflation is acting as a deterrent to investment and eco­nomic growth.

There are several factors con­tributing to the high inflation rate in Pakistan: The ongoing conflict in Ukraine has disrupted food pro­duction and led to price hikes.

Recent flooding in Pakistan, causing damage to infrastructure and crops. A decline in the val­ue of the Pakistani rupee, result­ing in increased costs for import­ed goods and services. Escalating energy prices.

PCB announces match officials’ for New Zealand series

To combat this inflation crisis, the Pakistani government can imple­ment various measures, including increasing subsidies for essential items like food and fuel, imple­menting a tighter monetary policy to raise interest rates and reduce the money supply, and stabilising the Pakistani rupee. While these ef­forts can have a significant impact on the inflation rate, they may take some time to yield results.

The people of Pakistan are cur­rently grappling with a high­ly challenging economic situa­tion. The rapid surge in inflation is making life difficult for many citi­zens, who are already struggling to make ends meet.

I strongly urge the government to take all necessary steps to ad­dress this pressing issue. It is cru­cial for the government to pro­vide assistance to those who are finding it difficult to meet their basic needs. I believe that it is vi­tal for the media to raise aware­ness of the inflation problem in Pakistan. By publishing letters from concerned citizens, the me­dia can exert pressure on the gov­ernment to take prompt action.

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AREEBA ANWAR,

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Inflation in 2023 squeezed life out of Pakistanis

Prices of POL products, gas and power jacked up to unprecedented levels

In the year 2023, first the coalition government and then the caretaker set-up continued to drop inflation bombs on the people.

In January 2023, the prices of petrol and high-speed diesel (HSD), which were Rs214 and Rs227 per litre, went up to Rs267.34 and Rs276.21 in December this year, respectively.

During the tenure of the caretaker government, the prices of these two fuels crossed the triple century mark for the first time in the country’s history – with petrol hitting Rs331 and HSD Rs329 per litre.

Overall, the price of petrol increased by Rs53 per litre and the cost of HSD went up by around Rs49 per litre during the year 2023.

From January to August, the coalition government increased the prices of petroleum products seven times, maintained them twice and reduced them six times.

The interim set-up increased them four times, reduced them thrice and maintained them twice.

During the last three months of the year, the prices of petrol and HSD were reduced by Rs64.04 and Rs52.99 per litre, respectively.

In January, the petrol was being sold for Rs214, HSD for Rs227.80, light diesel oil (LDO) for Rs169, and kerosene for Rs172 per litre.

The first price hike of the year came in the month of February when the price of petrol jacked up to Rs249, HSD to Rs262.8, LDO to Rs187, and kerosene to Rs189.83 per litre.

On August 2, just before handing over power to the caretaker set-up, the coalition government increased the prices of petrol and HSD by Rs19.95, taking them to Rs272.95 and Rs273.40, respectively.

Read Weekly inflation slows down

The interim government announced a hefty hike in the prices of petrol and HSD as soon as it came to power.

On August 16, the price of petrol was increased by Rs15.5 and diesel by Rs20 per litre.

However, the caretaker government kept the prices of LDO and kerosene unchanged.

On September 1, the prices of petrol and HSD were increased once again by Rs14.91 and Rs18.44 per litre, respectively, crossing the barrier of Rs300 for the first time in the country’s history.

After this hike, petrol and HSD were available for Rs305.36 and Rs311.84 per litre.

On September 15, petrol and HSD prices were hiked by Rs26.02 and Rs17.34 per litre respectively, taking them to their all-time high of Rs331.38 and Rs329.18 per litre.

After October 1, the caretaker government started providing relief to the people. It reduced the prices of petrol and HSD byRs64.04 and Rs52.99 per litre till December 15.

During the year 2023, the prices of electricity and gas also continued to increase with an additional Rs1.52 trillion withdrawn from the pockets of consumers.

Gas became expensive by 312% in the year, and its consumers put up with an additional burden of Rs711 billion.

An additional burden of Rs477 billion was put on the consumers of electricity.

The average electricity tariff reached Rs29.78 per unit.

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Inflation in Pakistan Essay

Do you know what the Inflation in Pakistan Essay Pakistan is considered to be one of those unfortunate countries in the world which have the highest Inflation rate in the world? Basically, inflation is known as the term in which the prices of commodities are changed on the regular basis. The inflation rate basically identifies the change of prices in a particular area, and it is also being observed that once the inflation rate is made high the buying power of the people just gets reduced which means that the basic necessities of life get beyond their buying power and beyond their reach and access. The Inflation in Pakistan Essay is being calculated and reported by the Pakistan Bureau of Statistics known as PBS. For the month of November-December 2022, the inflation rate which is being recorded for Pakistan is 10.90 percent.

The Inflation in Pakistan Essay was recorded at 10.90 percent in November 2022. Pakistan has a history of the most unpredictable and most varying inflation rates in the world and there are so many internal and external factors that contribute to the sudden change and decline of Inflation in Pakistan Essay. Amongst these factors the most crucial factor is the political instability in the state, as the weak government and administration are the main cause of the increased inflation rate in any state, secondly, the Pakistan currency is declining day by day which is increasing the international debt on the state day by day because the debt has to be paid in Dollars and the decline in Pakistani rupee is increasing the worth of dollars as this is another very important and core factor due to which the Inflation in Pakistan Essay is not getting stabilize and fluctuations in it are being observed on regular basis.

Let us have an overview of the inflation Rates in Pakistan in the various tenures and time durations. From the time duration and time span of 1957 to 2013, the average rate in Pakistan is 8.02 percent. There are various time periods when the inflation rate is either abnormally raised or declined. The real-time example of this is when the rate in Pakistan was raised to a massive height of 37.81 Percent in December of 1973 and at the same time, there is a record low ratio calculated which was just -10.32 Percent in February 1959. In Pakistan, the most important categories in the consumer price index are food and non-alcoholic beverages, housing, water, electricity, gas, and fuels (29 percent); clothing and footwear (8 percent), and transport (7 percent). The index also includes furnishings and household equipment (4 percent), education (4 percent), communication (3 percent), and health (2 percent). The remaining 8 percent is composed of recreation and culture, restaurants and hotels, alcoholic beverages and tobacco, and other goods and services.

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I am committed to helping Pakistani students craft successful career paths by merging their individual passions with market trends. As a career counselor, we'll explore both well-established fields and modern industries to find the best fit for you. With personalized counseling and strategic planning, we aim to transform your educational journey into a thriving professional future.

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Essay on inflation/Rising prices in Pakistan with quotations

Rising prices / inflation essay 300 - 400 words.

Inflation essay for 2nd year, class 12 PDF download

Inflation is taxation without legislation - Milton Friedman

Inflation is the crabgrass in your savings - Robert Orben

Inflation is the parent of unemployment and the unseen robber of those who have saved - Margret Thatcher

Production is the only answer to inflation - Anonymous

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GDP growth is expected to slightly rise to 2.3% in FY25, while inflation is predicted to drop to 12.2%, report

The United Nations Economic and Social Survey of Asia and Pacific (UNESCAP) 2024 report has forecasted Pakistan’s GDP growth at 2% and inflation at 26% for the ongoing fiscal year, expecting growth to slightly increase to 2.3% in FY25, while inflation is predicted to decrease to 12.2%.

The report further said that Pakistan’s tax gap is to remain approximately 3% of its GDP, with the potential to increase to more than 12% from the current 9%.

UNESCAP mentions that although Bangladesh, Pakistan, and Sri Lanka have low tax levels, their tax gaps are considered moderate. However, these gaps appear larger when measured against current tax revenues instead of GDP. 

The report suggests that enhancing tax policies and administration might not be sufficient to address the significant development financing shortfalls in these countries. 

It recommends comprehensive improvements in socioeconomic development and governance, along with larger-scale tax revenue enhancement.

The Federal Board of Revenue’s (FBR) tax-to-GDP ratio is currently around 9%, based on a projected tax collection target of Rs9415 billion for this fiscal year. UNESCAP estimates this ratio could increase to 12%.

The report also notes the economic challenges faced by Pakistan, including political unrest and a major flood affecting agricultural production. 

It mentions Sri Lanka’s economy contracted by 2.3% in 2023, following a 7.4% contraction in 2022.

Facing fiscal pressures, Pakistan and Sri Lanka have sought IMF assistance. Pakistan entered into an IMF agreement in mid-2023, enabling further support from countries like China, Saudi Arabia, and the United Arab Emirates. 

Sri Lanka, already under an IMF program, has seen some macroeconomic stabilization in 2023, with both countries implementing fiscal adjustments to achieve fiscal sustainability.

While Bangladesh has also approached the IMF, its request was precautionary and aimed at securing additional funding before facing financial difficulties. 

The report underscores that better tax strategies and management may not be the sole solution for bridging the development financing gaps in countries with low tax intake, highlighting the need for broader improvements in socioeconomic and governance aspects.

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