Miftah Ismail says ‘inflation rate expected to go up due to floods’

ISLAMABAD: Finance Minister Miftah Ismail has said that the inflation rate is likely to go up due to floods in Pakistan and the government will restrict its expenditures keeping in view limited resources.

While talking to Bloomberg, Miftah Ismail predicted that the inflation rate will be 15 per cent in the current fiscal year, whereas, it was inevitable to ban imports of luxury items for a long time.

The finance minister said that the nation will have to keep in view the limited resources. He suggested that the nation will have to change its old ways to restrict expenditures.

“If I have a limited amount of US dollars, then I have to make sure to utilise it for procuring wheat.”

READ: INFLATION JUMPS BY 2.4PC IN PAKISTAN DURING AUGUST 2022

Ismail said that the vegetable prices were being restored to the previous ones which were hiked during the peak time of the floods. He added that Pakistan is also importing vegetables from neighbouring countries.

“I want to see a Pakistan that lives within its means. That’s it,” Ismail, 57, told Bloomberg News. “Nothing can happen in one year, but we can start.”

The outlook has been further complicated in the aftermath of historic floods, which could have an economic impact of at least $10 billion, adding to a list of problems for Ismail that includes political turmoil and raging inflation.

READ: ‘REAL INDEPENDENCE’ NOT ACHIEVED BY TAKING 89% HIGHER LOANS: MIFTAH ISMAIL

Less than a week ago the International Monetary Fund gave Pakistan a $1.16 billion lifeline to avoid an imminent default. Pakistan also secured pledges for a total of $9 billion in investments and loans from Qatar, Saudi Arabia, and the UAE. Ismail said he expects a $1 billion investment in listed state-owned companies to materialize in about a month.

Ismail expects economic growth of more than 3.5% for the fiscal year that started in July, down from an initial target of 5%. He predicts that inflation, running at the highest in 47 years and the second highest in Asia, is close to its peak and will average 15% for the year.

Pakistan’s export revenue is dominated by textiles, and much of its cotton crop was washed away. The government will allow the textile industry to import as much cotton as it needs to keep the looms running. Islamabad is now also importing tomatoes and onions from Afghanistan, Iran and Turkey after shortages shot prices higher, Bloomberg reported.