Inflation in Pakistan Could Reach 30%
Already above 27%, inflationinflation in Pakistan could rise to 30% as rising prices of tomatoes, potatoes and onions hurt Pakistanis, including flood victims, and more food supplies.
Experts are concerned that the situation could lead to a tightening of monetary policy. Weakened by dwindling foreign reserves and the fastest inflation in 50 years, Pakistan is facing food shortages after monsoon rains flooded a third of the country and destroyed crops.
Last weekend, eight more areas were added to the list of 80 flood affected areas. Huge floods exacerbated food shortages and drove up prices. Before the flood, onions sold for 300 rupees ($1.37) per kilogram, worth 50 rupees. Dadu suffered the biggest losses in rice and onion production.
In addition, the price of potatoes has increased four times to 100 rupees/kg, tomatoes have increased by 300% to 400 rupees/kg and the price of oil has increased by 400%.
Elsewhere, warehouses were flooded, affecting milk and meat supplies. Rising food prices are exacerbating public suffering and a vulnerable economy that has received little funding since the International Monetary Fund’s $1.16 billion bailout and $9 billion in guarantees from Qatar from Saudi Arabia and the United Arab Emirates (UAE ).
The flood, which is estimated to have caused $10 billion in damage, has so far killed more than 1,300 people and forced 500,000 into camps. It also flooded large amounts of farmland and destroyed crops in countries where agriculture accounts for a fifth of the economy.
Finance Minister Miftah Ismail said all 1.5 million hectares of cotton crops in Sindh province and 65 percent of the region’s rice production had been destroyed. The entire date crop, 20% of sugarcane and half of onion and other vegetable crops were destroyed.
