According to government data, Pakistan experienced an annual inflation rate of 35.37% in March, the highest it has been in over 50 years. The month-over-month inflation rate was 3.72%, while year-on-year inflation averaged 27.26%. As a result, the cost of essential food items, including wheat flour, sugar, and edible oil, has increased significantly, leading to at least 20 deaths in crowd crushes at food distribution centers during Ramadan.
The government has been rushing to comply with International Monetary Fund (IMF) requirements in order to obtain a much-needed bailout. Unfortunately, nearly all of the country’s 30 mobile phone assembly plants, including three international brands, have shut down, jeopardizing the jobs of approximately 20,000 workers.
Manufacturers claim they have run out of raw materials due to import restrictions and are unable to import necessary parts and components worth $170 million per month because the government is not permitting the opening of credit letters. As a result, businesses have paid their employees half of their April salaries in advance and placed them on hold, with promises to contact them when production resumes.
The high inflation rate is having a significant impact on low- and fixed-income citizens, making it difficult for them to make ends meet. Although the government has taken steps to reduce inflation, such as increasing interest rates and decreasing import duties on essential food items, these measures have had limited success.
Pakistan is also facing challenges due to a widening current account deficit and a decline in foreign exchange reserves. The government has sought assistance from international organizations to address these issues.
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