Shaukat Tarin Says Pakistan’s Inflation Is “Imported”

Advisor to the Prime Minister on Finance and Revenue Shaukat Tarin has announced that the prices of petrol, edible oil, steel, and coal will fall in the next three to four months, which will bring down inflation. Addressing the media persons in Peshawar, he said the inflation in Pakistan was caused by four to five imported products including oil, coal, edible oil, and steel. He affirmed that if inflation induced by these imports ever got reduced, domestic inflation would get lower even than the inflation in recent years. He said that the next few months would witness a decrease in inflation, adding, “With low inflation, the exchange rate will stabilize. This is called trade equalization.” Tarin highlighted that Pakistan was one of only two or three countries in the world whose debt-to-GDP ratio dropped during the pandemic. He said, In response to questions on how local analysts across the board have reacted so far toward the IMF’s loan conditions, Tarin remarked, “Drawing room economists and television analysts talk without any research. Our debt-to-GDP ratio and the net debt has actually decreased.” About Pakistan’s progress and how inflationary pressures have rattled the country’s financial ecosystem, the Advisor said the government had no other choice but to go to the IMF. “Prime Minister Imran Khan went to Saudi Arabia, the United Arab Emirates, Qatar, and China to borrow money. He had said in the past that he would not borrow from anyone, but he was forced to,” he said. Although Tarin’s remarks might seem a little harsh when it comes to coming to grips with typical macroeconomic indicators, the Finance Advisor reiterates that the nation still needs to be a little more patient as “good days are finally coming”. Notably, Pakistan saw a drastic increase in trade deficit in November as the gap rose to 162.4 percent. The huge deficit was caused by the growth in imports. Besides, the KSE-100 index also dropped by 4.71% in a single day, the highest since March 2020. As a result of the widening gap, the dollar rate reached its all-time high and stood at Rs. 176.42 after gaining 94 paisas on 2 December.