LAHORE: Battered by a sharp rise in the prices of petrol, electricity and other utilities, the Pakistani public feels the government at the helm has done wrong in difficult times and fears that pressure inflationary pressures won’t get unbearable to cross the 20% mark in not-so-distant future, but that may be the case all over the world, as supply chain disruptions in the time of coronavirus, then the Russian-Ukrainian war have literally wreaked havoc on all continents. Research shows that in India, widespread price increases are the biggest headwind consumers face today. Faced with record inflation, consumer spending in India has already fallen by 18%, according to the Hindu Business Line, a Chennai-based business newspaper published by Kasturi & Sons, publishers of the Hindu newspaper.
Another prominent Indian media house, The Economic Times, said: “The other worry is a concomitant rise in interest rates. Consumer price index (CPI) inflation is expected to average 6.3% this fiscal year, compared to 5.5% last year. Given this, the Reserve Bank of India (RBI) is expected to raise the key repo rate by a further 75-100 basis points (bps), bringing the cumulative rate hike for the year to 115-140 bps. Certainly, both affect the economic recovery. Higher prices drive up the cost of living and therefore erode consumers’ purchasing power. The higher cost of borrowing is strangling demand in interest rate sensitive segments. However, this fiscal inflation could further harm growth for two main reasons.
Doha-based Al-Jazeera TV says: “India’s economic growth slowed to a one-year low in the first three months of 2022, hit by weakening consumer demand amid of soaring prices that could force the central bank to control inflation without harming growth. More difficult. Gross domestic product rose 4.1% year-on-year in January-March, government data showed on Tuesday, in line with economists’ forecast of 4% in a ‘Reuters’ poll, and below 5.4% of growth in October-December and growth of 8.4% in July-Sept. The short-term outlook for the economy has darkened due to a surge in retail price inflation, which hit an eight-year high of 7.8% in April. Soaring energy and commodity prices caused in part by the Ukrainian crisis are also compressing economic activity.
In Bangladesh, the central bank raised its policy rate by 25 basis points to 5% as part of its efforts to control consumer prices.
Bangladesh News 24, a Bangladeshi English and Bengali language news site, says: “The central bank has reported rising prices of fuel oil, food and non-food items in the international market. Inflation in Bangladesh hit 6.29% in April, the highest in 18 months. The central bank also noted that the price hike came as the global economy recovered following expansionary measures taken by countries around the world as the pandemic waned.
In Turkey, inflation has soared to 73%, a 23-year high, as food and energy prices soar.
CNBC, an American basic business cable news channel, recently reported: “Turkey’s inflation for the month of May rose 73.5% year-on-year, its highest level in 23 years. , as the country grapples with soaring food and energy prices and President Recep Tayyip Erdogan’s longstanding unorthodox monetary policy strategy. million people grew 91.6% year-on-year, the country’s statistics agency reported, highlighting the pain faced by regular consumers as supply chain issues, rising Energy costs and Russia’s war in Ukraine are fueling global inflation Economic analysts expect Turkey’s inflation trajectory to only worsen.
In Europe, inflation in May hit its highest annual level since the creation of the euro in 1999, the European statistics agency reported recently, as a record spike in energy and fuel prices Russia’s war-fueled food in Ukraine continues to ripple through the continent’s economy, raising the specter of a relapse into recession.
The New York Times says: “Annual inflation in the 19 countries that use the euro hit a record high of 8.1% in May, down from 7.4% in April. Prices have risen for 10 straight months and show few signs of slowing, deepening a cost-of-living crisis for consumers and forcing European policymakers to commit to various measures to ease the pain. Energy costs remain the biggest driver of price increases for consumers and businesses, rising in May by a record 39.2% from a year earlier, while processed foods, alcohol and tobacco increased by 7%.
In the case of the United States, consumer price inflation reached 8.3% in April, showing a slight moderation compared to previous months.
On the situation in Germany, The New York Times says: “Germany, Europe’s largest economy, was among the hardest hit, with inflation hitting 8.7%. France (5.8%), Spain (8.5%) and Italy (7.3%) also saw consumer prices continue to climb for a month, prompting lawmakers in those countries to offer caps on energy prices or rebates to low-income households to offset the cost. gasoline and diesel.
On the impact on the countries closest to Russia’s borders, a reputable American newspaper said: “Inflation in Estonia, for example, which had previously weaned itself off Russian gas, but is now subject to volatile market fluctuations in energy prices, augmented by a meteoric annual rate of 20.1%, nearly double the 11% recorded in January. In Lithuania, annual inflation reached 18.5% and in Latvia it reached 16.4%.
In the UK, the Bank of England has warned that inflation could hit 10% within months as fuel and food prices put pressure on household budgets.
The BBC aptly describes the evolution of the situation: “Inflation is the increase in the price of something over time. For example, if a loaf of bread costs £1 one year and £1.09 the next year, this represents an annual inflation rate of 9%. Energy bills are the biggest contributors to inflation right now, as oil and gas prices remain at high levels, in part due to the war in Ukraine. After a rise in the UK energy price cap last month, average gas and electricity prices jumped 53.5% and 95.5% respectively from a year ago . Fuel prices are also rising, with the average price of petrol reaching 161.8p per liter in April 2022 from 125.5pa the previous year. The April price is the highest on record.
The world-renowned British outlet noted, “Costs of raw materials, household items, furniture, restaurants and hotels are also rising. The rate of VAT, the tax paid when buying goods and services, has increased for some businesses. The government reduced VAT for hospitality and tourism businesses during the pandemic, but on April 1 it returned to the standard rate of 20%. Air passenger duties and vehicle excise duties have also increased, as have the cost of postage and water bills in England and Wales. Higher interest rates also make mortgage payments more expensive for some homeowners. The overall inflation rate is an average and prices in different regions are rising at different rates. A food industry boss has warned that food prices could rise by up to 15% this year.