Purchasing power

Per some government representatives, purchasing power is increasing in the country. This needs some dissection as most independent observers and researchers have expressed their concerns and doubts about such claims. Just a couple of recent developments can help us in figuring out how much purchasing power has improved among the people of Pakistan. In Peshawar, university employees and teachers walked for eight kilometres in scorching heat to protest against the reduction in their allowances. One can imagine how much their purchasing power must have declined to force them to take that many steps.

The recent PSLM survey highlights the fact that nearly 17 percent of people in Pakistan are in danger of facing food insecurity. The monthly data of inflation for May 2021 shows that inflation is still hovering around 10 percent. Our value of imports is still nearly double that of our exports. Foreign direct investment has also declined sharply; and in terms of per capita GDP and on the UN’s Human Development Index Pakistan is still one of the worst performers. Pakistan’s total GDP is still lower than what it was in 2018. It is strange that despite all these hard facts and figures, the government still feels it can claim that the purchasing power of people has increased.

What the government needs to do is take a proper stock of affairs and present a true picture of the economy to the people of Pakistan who are reeling under rising inflation and diminishing livelihood opportunities. The declining purchasing power in the country can also be gauged from lackluster business activities and reduced job opportunities which have pushed millions of families to poverty. The increasing number of people who seek cash transfers and throng free-food outlets is another sign of the continuing economic hardships people are facing. If the government does not have the capability to turn the economy around, it may want to rethink making tall claims.