INFLATION HAS GONE UP TO 30 YEARS HIGH WHICH WILL CRIPPLE BUSINESS AND INDUSTRY– ICCI PRESIDENT

The rising inflation due to spiraling food and energy prices, which has gone up to 30 years high of 24.33 percent last month as against 6.37 percent in July of last year, is not only adding miseries to the general public, it is also badly hurting business and industry by negatively impacting economic activities in the country, said Muhammad Ijaz Abbasi, President, Islamabad Chamber of Commerce and Industry. He said that food inflation has ballooned to 33.81 percent in July – the highest in the region while overall inflation has rose to 24.33 percent.

He said five times increase in domestic oil prices has further pushed up the prices of every commodity and this phenomenon is not only increasing woes of consumers, it is badly hurting business activities in the country due to squeezed purchasing power of people. He said the overall CPI-based inflation registered a sharp increase in July 2008 as against the corresponding month of last year while food inflation at 33.81 percent has emerged as a major source of concern for people because it is making their life more difficult. He said in 2007-08, food inflation averaged at 17.6 percent as against 10.2 percent in 2006-07 and emphasized upon the government to take steps to arrest this rising trend in food inflation.

Muhammad Ijaz Abbasi said the holy month of Ramazan is round the corner while prices of dates, basan, white chana, dal mash, dal chana, sugar, branded tea etc. which are consumed in bulk in Ramazan have already shoot up significantly as price of Tapal mixture has surged by Rs 35 per kg, from Rs 310 to Rs 345 while price of 200 gram Tapal packet rose to Rs 76 from Rs 68 and price of a 100 gram packet has become costlier by Rs 4 to Rs 39. He said these high prices will put additional burden on the consumers who are already hit hard by high energy and food prices.

ICCI President said a thriving middle class is essential for healthy growth of business and industry while rising inflation in Pakistan is further diminishing purchasing power of people, creating slump in economic activities. He said this scenario is very discouraging for prospective investors while Pakistan badly needs foreign direct investment to cope with the challenges of unemployment and poverty. 

In the end, Muhammad Ijaz Abbasi said although oil prices have fallen to $114 per barrel from $147 in the international market, but the government has not passed on this relief to consumers and stressed for the need of immediately providing some relief to consumers by reducing prices of petroleum products. He said hike in petroleum products has increased transportation cost, food prices and input cost of doing business due to which people and businesses are facing difficulties and called upon the government to take urgent remedial measures to reduce the woes of people and business community.