‘PTI government falsely blamed for higher inflation since it came to power’- Economist Muzzammil Aslam
Muzzammil Aslam said, “While there is no denial of prevailing inflation, which is a global issue than Pakistan-centric, the incumbent government has been falsely blamed for higher inflation since it came to power.’
Core inflation, usually used as a benchmark for monetary policy, has been lower than headline inflation during the PTI first three years than the PMLN terms, which has enjoyed a relatively deflationary period globally in its five years.
Average core inflation in the PTI’s first three months was recorded at 6.9% vs. headline inflation at 8.8%. Compared with the PMLN, average core inflation (6.0%) was much higher than headline inflation (4.82%). It indicates that the competitiveness during the PMLN was compromised, as reflected from higher trade deficits due to contraction in export growth (2014-18).
While speaking about the progress of the Pakistan People’s Party, the economist said, “the PPP stands out in headline, core, and food inflation with record double digits witnessed in all categories. Headline inflation (13.82%), Core (11.4%), and Food (15.48%). Food inflation in the PTI term is the question mark and perhaps the only factor eating up the PTI political capital in the last three years.”
He added, “the food price hike is linked with country food security. The PMLN has destroyed the country’s comparative advantage of agriculture country through serving its vested interest. It is pertinent to note that average agriculture growth (2.18%) during the PMLN tenure was lowest since the 1990s and even worse when we focused on crop growth statistics (0.68%).”
Agriculture crop growth record lowest in PMLN term- Average 0.68%, PPP 1.33% & PTI 1.76%.
Despite the locust attack, the PTI government has successfully turned around the crop sector through incentivizing the farmers vis attractive support prices, cheaper inputs, and timely payment of crops. Moreover, the focus has further sharpened by issuing the Kissan cards and loans to the farmer.
In the future, we are expecting bumper Kharif crops, which will add a considerable sum to the rural economy, never seen last 13 years. Below is the crop’s target for FY22 and from where PTI took over.
Similarly, the PTI government has been wrongly blamed for the energy sector. Under its belt, it has the credit to negotiate the IPP deals of 1994 and 2002 policies, which has saved hundreds of billion rupees.
Despite COVID, the government has managed to bring the circular debt in FY21 to just Rs 130bn from more than Rs 450bn.
Currently, the bigger issue country is going through the excess capacity committed by the PMLN government on a ‘Take or Pay’ basis. It has accumulated huge capacity payments and, in turn, circular debt. Several measures are already in place to improve electricity consumption, but one cannot avoid the higher tariff to mitigate the looming power crisis.
Muzzammil Aslam concluded, “We are confident of dealing with the country’s structural deficit, but it requires the exogenous crisis to stem first. Not to forget, we had to deal with default risk, higher deficits, a threat from India, COVID, Afghan issue, and global inflation woes just in the last 36 months, but even then, we managed to bring growth back on track.”
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