Pakistan's Inflation Crisis! Petrol Prices Surge by 10 Rupees per Litre

Pakistan: According to finance minister Ishaq Dar, the Pakistani government has decided to increase the price of petrol by 10 rupees per litre for the next 15 days. This occurred in the midst of the biggest economic crisis the nation has ever experienced, a sharp currency devaluation, and rising interest rates.

Little progress is being made by the government in achieving a staff-level agreement

While the prices of high-speed diesel and light diesel oil stayed unchanged, the cost of petrol jumped to (PKR) 282 per litre. The cost of paraffin oil has also gone up by (PKR) 5.78 per litre. The rate of inflation for March 2023 was 35%, one of the highest ever. As food costs spiral out of control, reports indicate that inflation is close to 50% for the more disadvantaged classes. The calamity is taking place as little progress is being made by the government in achieving a staff-level agreement (SLA) for the relaunch of a stalled IMF bailout. A significant factor driving high inflation rates is the rupee's ongoing fall and extremely high food prices.

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Pakistan is now on track to receive a tranche of $1.1 billion

In light of high inflation and a rising unemployment rate, the IMF recently reduced its prediction for Pakistan's economic growth rate from 2% to just 0.5% for the current fiscal year. With just a little more than $4 billion in reserves, the nation is still on the precipice of default. The United Arab Emirates' confirmation of financial help in the amount of $1 billion has eliminated yet another obstacle to Pakistan's capacity to receive funding from the IMF. The international organisation has previously demanded that Islamabad obtain $3 billion from other countries in order to prolong its USD 6.5 billion bailout package. Currently on track to receive a $1.1 billion tranche, Pakistan will need it to address a serious balance of payments problem. Pakistan has finally gotten the funding it requires. The funds will not be distributed until a staff-level agreement is reached, which was originally scheduled to happen in November of last year.

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