The inflation rate for this fiscal year is still 24% even if it decreased to 11% in May from nearly 30% in the same month last year.
Compared to our population growth rate of 2.55%, our economic growth rate is a pitiful 2.2%. Our economy grew at around zero percent last year. Pakistanis have therefore seen an almost 3% increase in poverty over the past two years. Furthermore, the proportion of impoverished Pakistanis who have become poorer has increased due to the unbalanced impacts of inflation. Because of this, 90 million Pakistanis are estimated by the World Bank to be below the poverty line, and an additional 10 million are predicted to do so this year.
Our State Bank’s excessive issuance of currency notes and its quick devaluation are the two main, interconnected factors for the record-breaking inflation we have experienced over the past two years. Since the last NFC Award in 2010, we have accrued significant and growing federal deficits, forcing the State Bank to create notes in order to finance them.
The significant foreign exchange loans that our government must repay have caused our currency to depreciate quickly. These loans were taken out not only to cover the trade deficit, or the difference between our larger imports and smaller exports, but also because we borrowed large amounts of foreign exchange over the years for numerous megaprojects that have not produced any foreign exchange earnings.Our currency is depreciating because these debts are about to mature, and we are unable to find ever-newer ways to pay for the misbehavior and misguided policies of our government.
