PM takes serious notice of price hike

ISLAMABAD: Taking serious notice of the current disproportionate prices and ineffectiveness of systems to arrest it, Prime Minister Imran Khan on Thursday called for launching a special campaign, involving all the stakeholders.

It was noticed that more than 50 daily use items including sugar have got pricier at the Utility Stores Corporation (USC).

The prime minister also directed that a performance evaluation mechanism, with reward and punishment be developed to ensure success of this campaign. Action taken on the directions shall be intimated to the Prime Minister’s Office within seven days for perusal of the prime minister.

“Effective implementation of local and special laws concerning efficient service delivery and relief to the general public is one of the prime responsibilities of field administration. Lack of coordination among various stakeholders, poor understanding/implementation and indifferent attitude has established redundancy of these laws, thus increasing sufferings of general public," the Prime Minister’s Office says.

The prime minister, according to the Prime Minister’s Office, while taking serious notice of current disproportionate price hike and ineffectiveness of the systems to control the same, has been pleased to desire a special campaign to control the price hike may be launched which shall include:

i. A strategy shall be devised by all concerned stakeholders to implement price control laws effectively from the wholesale markets to retail shops;

ii. Prime and Market Control Committees shall be made more effective and should take stern actions against the perpetrators under law;

iii. Field officers shall frequently visit the wholesale markets and be present at the time of auctions to determine realistic rates;

iv. All the provincial secretaries shall frequently have a surprise check in the districts;

v. Special Branch shall report daily the implementation of directives to the Chief Secretary and the Chief Minister concerned;

vi. Mechanism be developed to check unscrupulous elements, which charge un-proportionate prices without sufficient cause;

vii. Strict action shall be taken against hoarding;

viii. Price Control Committees shall notify the rates of essential commodities regularly and the same shall be implemented effectively, and,

ix. A performance evaluation mechanism, with reward and punishment be developed to ensure success of this campaign

Action taken on the above directions shall be intimated to this office within seven (7) days for perusal of the prime minister.

Meanwhile, Pakistan’s economic growth will be negatively impacted in the short run due to tighter monetary and fiscal policies as a result of the International Monetary Fund's bailout package, a leading economic research firm said in a report on Wednesday.

Fitch Solutions, the macro research arm of global credit rating agency Fitch ratings, said they were revising their forecast for Pakistan's real GDP growth for the outgoing fiscal year from 4.4 percent to 3.2 percent, and the upcoming fiscal year 2019-20 to come in at 2.7 percent, down from 4.0 percent previously.

Fitch noted that this was in lower than the forecasts by Bloomberg of 3.3 percent for the outgoing fiscal year and 3.5 percent for 2019-20.

"We believe that the bailout package from the International Monetary Fund (IMF) will see tighter monetary and fiscal policies in Pakistan, which will be negative for growth in the near term," said Fitch Solutions in the report.

"That said, investment into the China-Pakistan Economic Corridor (CPEC) will continue to provide some support to the economy," it added.

Pakistan reached a $6 billion bailout agreement with the IMF in May to address a balance of payments crisis, following which the central bank raised interest rates by 150bps. Shortly afterwards, the finance ministry presented an austerity budget with increased taxes aiming to trim the government's primary deficit and shore up its revenues.

Fitch said the tax-based measures to cut the deficit, coupled with constantly rising inflation, would further erode purchasing power and result in a marked decline in consumption.

"Given our expectations for continued upside pressure on consumer prices over the coming months, we believe that the consumers' purchasing power will continue to fall over the coming months, thereby weighing on consumption," it said.

However, it noted that that some of the effects of price hikes would be partially offset by the "government's populist measures, such as providing electricity subsidies to consumers who use less than 300 units of electricity per month".

The research firm also gave a bleak forecast on the government's aims to raise tax revenues, compounded by little improvement in net exports weighed down by a global slowdown and the likelihood of imports further increasing over the coming months.

"While Pakistan and the IMF have agreed on focusing on tax-based measures to manage the fiscal deficit, according to media reports, we believe that the Pakistani government will fall short of its ambitious revenue targets and will likely have to cut spending to meet the primary deficit target of 0.6 percent of GDP," it added.