Concept Note:

The quadruple crises of economic meltdown, political turmoil, tough IMF program implementation and natural disasters, has jeopardized millions of people’s rights to an adequate standard of living. Pakistan is experiencing the worst stagflation with average inflation around 25.46% (July-January, FY23) and an expected growth rate less than 1% for FY2023. Loss of income and livelihoods at one hand and historic high inflation with prices at their peak on the other hand, has really taken away the purchasing power of people. In the follow up conditions of ongoing IMF’s 9th review, government has introduced a 170 billion rupees ($643 million) finance bill to secure funds from the International Monetary Fund (IMF) and avoid default. The General Sales Tax(GST) has been increased from 17% to 18% and higher taxes have been imposed on the cigarettes. Subsidies are drawn from petroleum products and electricity.

These much-needed measures to restore IMF program at this critical juncture, are inflationary in their very nature. Inflationary pressures are expected to peak further, and experts believe that headline inflation will soar to 30-35%. The Sensitive Price Index (SPI) computed on weekly basis to assess the price movement of 51 essential commodities collected from 50 markets in 17 cities of the country rose by 41.54 percent in the week ending on 23 February 2023, reflecting a rise of 2.78 percent from the week before. Owing to tight monetary and fiscal policies, the unemployment is on the rise leading to more people being pushed under the poverty line. By all odds, this low growth and high inflation combination—the stagflation—is expected to continue at least in next 18 to 24 months. It is in this situation that the common man is—and likely to continue to be-- under the immense pressure of daily loss in purchasing power. This webinar, in a forward looking context, aims to have the answers to what effective and implementable policy measures can be taken by the stakeholders—the federal and provincial governments, the central bank, private sector-- to protect people from inflationary pressures of the (much needed) stabilization policies of the government. While there are plenty of discussions on long term solutions, we are most interested to know what can be done in the immediate short run and in the medium run as people need help right now and today1.