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Express Tribune
2 hours ago
- Business
- Express Tribune
Eidul Azha sees artificial price hike in Karachi as tomatoes, essentials soar
Market analysts caution that IMF-related measures in the upcoming FY2026 budget—particularly new taxes and adjustments in energy prices—may lead to a renewed spike in inflation. PHOTO: FILE Listen to article The customary artificial surge in prices of vegetables and condiments ahead of Eidul Azha continues unabated this year, with rates of essential kitchen items increasing by up to 200 per cent in Karachi markets, Express News reported. According to a report, the price of tomatoes has jumped from Rs60 per kilogram to as high as Rs160 per kilogram, marking an increase of over 160 per cent within a week. The cost of garlic, which was retailing at Rs500 per kg, has surged to Rs700 per kg, while ginger now sells at Rs800 per kg, up from Rs600. Fresh coriander, typically priced at Rs20 per bunch, is now being sold at Rs40, and green chillies have risen from Rs380 to Rs450 per kg. In Karachi, the price of lemons has surged from Rs250 to between Rs350 and Rs400 per kilogram. Raw papaya, commonly used to tenderise meat during Eid preparations, is now retailing for up to Rs200 per kilogram. Despite repeated complaints, there appears to be little regulatory oversight to curb these arbitrary price hikes as citizens have called on the city administration to intervene and enforce official price lists, warning that such unchecked inflation burdens lower-income households during the festive period.
Express Tribune
4 days ago
- Business
- Express Tribune
Inflation rate jumps tofive-month high of 3.5%
Market analysts caution that IMF-related measures in the upcoming FY2026 budget—particularly new taxes and adjustments in energy prices—may lead to a renewed spike in inflation. PHOTO: FILE Pakistan's annual inflation rate accelerated to 3.5% in Maythe highest level in five monthsdue to a sudden spike in food prices ahead of the budget, breaking the downward spiral that had persisted for a year and a half. The Pakistan Bureau of Statistics (PBS) reported on Monday that the prices of a basket of essential goods and services rose at an average rate of 3.5% last month. This is the highest reading seen in the past five months and was contrary to official expectations. Nonetheless, it remains far below the fiscal year's inflation target of 12%. In its monthly economic outlook report, the Ministry of Finance had projected inflation to remain between 1.5% and 2% in May. The actual rate was more than double that forecast and fell within the ministry's expectations for June, ahead of the federal budget. For June, the ministry has projected that inflation could rise to between 3% and 4%. With the fresh inflation figure, the gap between headline inflation and the State Bank of Pakistan's (SBP) key policy rate has widened to 7.5%. The banking sector continues to benefit from elevated interest rates, at the expense of the rest of the country. Last month, the Monetary Policy Committee cut the policy rate by 100 basis points to 11%, citing a sustained decline in inflation. Despite the high rates, the money supply grew by 4.7% in May. For the upcoming fiscal year, the government has set a 7.5% inflation target, allowing further room for interest rate cuts. Average inflation during the first 11 months (JulyMay) of the current fiscal year slowed to 4.6%, significantly below the annual target of 12%. This lower average inflation rate will form the basis upon which the increase in pensions and salaries of the government employees will be determined. The government is considering an increase of 6% to 10% in wages and pensions, in line with the reduced average inflation. Core inflationexcluding food and energyeased in both urban and rural areas, dropping to 7.3% in cities and 8.8% in rural areas, according to PBS. Average core inflation remains about 3% below the policy rate, providing further space for the SBP to reduce interest rates. However, under International Monetary Fund (IMF) policy, the government switched the benchmark for borrowing costs from core to headline inflation nearly four years ago. Urban inflation rose to 3.5%, driven by rising food costs. In rural areas, prices turned positive again, with inflation recorded at 3.4% in May. PBS compiles inflation data from 35 cities and tracks 356 consumer items. In rural regions, data is collected from 27 centres and includes 244 items. The PBS data showed that food prices resumed their upward trend. Urban food inflation was recorded at 5.3%, and rural food inflation at 2.1%. Chicken prices soared 52% last month, followed by a one-third increase in pulses, a 30% rise in fresh fruits, 26% in butter, 22% in powdered milk, and 21% in sugar. The government failed to honour its promise of keeping sugar prices under check, following last year's decision to allow exports. The rise in sugar prices is also boosting tax revenues, as the government has linked the 18% sales tax on sugar to the fortnightly inflation rate. Meat prices increased by 12%, while fresh milk rose by 10%. Onion prices remained 54% lower compared to a year ago, while tomato prices dropped 32%, wheat 24%, and tea 18%. Non-perishable food items saw a 5.1% increase in inflation last month. Electricity charges were 29% lower year-on-year, while petrol remained 8% cheaper despite increased taxation. Although global crude oil prices have remained largely stable, the depreciation of the rupee led the government to pass on a Rs3.5 per litre impact on petrol and Rs1 per litre on diesel. Global crude prices are not expected to rise significantly, and overall commodity prices are projected to decline by 15% this year.
Express Tribune
4 days ago
- Business
- Express Tribune
Pakistan's CPI inflation rises 3.46% in May on annual basis
Market analysts caution that IMF-related measures in the upcoming FY2026 budget—particularly new taxes and adjustments in energy prices—may lead to a renewed spike in inflation. PHOTO: FILE Listen to article Pakistan's consumer price index (CPI) inflation rose 3.46% in May 2025 compared to the same month a year earlier, data from the Pakistan Bureau of Statistics (PBS) showed on Monday. However, on a month-to-month basis, the national CPI declined by 0.17% compared to April 2025. The CPI is based on the 2015–16 base year and combines urban and rural price indices. Urban inflation increased 0.07% in May over April, while rural inflation dropped 0.53%. The average inflation rate for July 2024 to May 2025 stood at 4.61%, compared with the corresponding period in 2023–24. The national index declined slightly due to drops in key categories including housing and perishable food items. Urban consumers saw a mild increase driven by price hikes in food staples like eggs (+24.38%) and chicken (+8.63%), while tomato (-20.80%) and onion (-12.05%) prices fell sharply. Rural areas experienced a broader decline due to a significant drop in food prices, including tomatoes (-32.99%), onions (-18.37%), and wheat flour (-10.52%). Nonetheless, rural areas reported price increases in eggs (+19.27%) and fresh fruits (+5.07%). Non-food price changes included higher costs for cotton cloth (+3.20%) and motor vehicles (+1.86%) in urban regions, while electricity charges (-7.03%) and motor fuels (-0.67%) dropped. In rural areas, dental services (+5.97%) and education (+1.59%) were among the most notable increases. On a year-over-year basis, urban inflation was up 3.51%, and rural inflation increased 3.39%. Food and non-alcoholic beverages rose 3.07% nationally, with non-perishable food prices up 5.01%, while perishable food items dropped 9.21%. Alcoholic beverages and tobacco saw a 7.86% annual increase, and clothing and footwear surged 9.66%. The most significant annual price increases were recorded in clothing, tobacco, and non-perishable food items. Meanwhile, perishable goods like vegetables and fruits experienced year-on-year price declines. The PBS compiles the CPI using data from 35 cities and 27 rural centres, tracking a total of 600 consumer items. The data provides a key indicator of cost-of-living trends that influence monetary policy and economic planning.
Express Tribune
5 days ago
- Business
- Express Tribune
Economic sentiment improves as 42% Pakistanis see country on right path
Market analysts caution that IMF-related measures in the upcoming FY2026 budget—particularly new taxes and adjustments in energy prices—may lead to a renewed spike in inflation. PHOTO: FILE Listen to article The Ipsos survey, conducted by the Paris-based market research firm, revealed on Sunday that 42% of Pakistanis believe the country is heading in the right direction — the highest figure recorded since 2018. Perceptions of economic strength reached their most favourable level since August 2019, while optimism overtook pessimism, marking what the firm described as a key psychological shift among the population. Finance Minister Muhammad Aurangzeb welcomed a new global survey showing consumer confidence in the country had surged to a six-year high, calling it a reflection of the government's disciplined economic strategy. He called the data 'encouraging' and said it showed the success of the government's policies implemented over the past 14 months. 'Consumer confidence in making major purchases and investments has doubled compared to the same period last year, indicating that households are beginning to feel more secure in their financial prospects,' the finance ministry said in a statement. The survey also found that confidence in job security was now at its highest level since 2019, suggesting improving labour market conditions driven by pro-growth policies. Aurangzeb reaffirmed that the government was committed to maintaining macroeconomic stability, deepening structural reforms, and ensuring inclusive economic growth. He noted that the rise in consumer confidence was broad-based, with notable increases seen in both urban and rural areas — particularly among youth and women. 'The findings of the Ipsos survey are a timely validation of Pakistan's economic direction and a clear signal that the country is on a steady path toward recovery and resilience,' he added. The survey comes as Pakistan shows signs of stabilisation under a $7 billion IMF programme secured last September. Inflation has slowed, the rupee has steadied, and foreign exchange reserves have improved, helping to boost public trust.
Express Tribune
28-05-2025
- Business
- Express Tribune
Govt plans tax hikes, subsidy cuts under IMF-backed budget
Market analysts caution that IMF-related measures in the upcoming FY2026 budget—particularly new taxes and adjustments in energy prices—may lead to a renewed spike in inflation. PHOTO: FILE Listen to article The government is poised to unveil a tough federal budget for the fiscal year 2025-26, with sweeping reforms likely to trigger a new wave of inflation as the government looks to meet stringent demands set by the International Monetary Fund (IMF), sources claimed. According to Express News, Virtual talks between Pakistan's economic team and IMF officials are ongoing, focused on increasing tax revenues and narrowing the country's fiscal deficit. The measures being discussed include raising the sales tax on luxury goods above the current 25 per cent threshold and expanding the list of taxable items. "The government is seriously considering strict fiscal steps to meet IMF targets," a senior official involved in the discussions said. The IMF has called for greater transparency in the tax system, expanded use of technology to curb evasion, and more authority for tax enforcement agencies. In response, the government is reportedly planning a tenfold increase in penalties for tax evasion via point-of-sale (POS) systems — from Rs0.5 million to 5 million — and may introduce criminal proceedings for serious offenses. Read more: SAI urges tax reforms in budget proposals Also under review is the removal of tax exemptions across various sectors, including solar panels. Analysts warn such moves could stifle investment in renewable energy and burden households already grappling with rising costs. "The withdrawal of tax relief for solar products will deal a blow to clean energy efforts," said one energy sector analyst. Farmers, too, may be hit hard. The proposed budget includes an 18 per cent general sales tax on fertilizers, pesticides, and agricultural equipment, along with possible hikes in federal excise duties on agri-inputs, according to sources. Economic experts caution that these measures, if approved, will drive up inflation, hamper agricultural productivity, and worsen the cost-of-living crisis. 'These are painful but necessary steps,' an official said. 'The priority is to secure the IMF deal to prevent a deeper economic crisis.' The budget is set to be presented on June 10.
