Islamabad, August 31, 2023 (PPI-OT): Dr. Hanif Mughal, Senior Vice President of Pakistan Economy Watch (PEW) said on Thursday that inflation is increasing due to the continuous depreciation of the rupee. The State Bank of Pakistan will have to increase the interest rate soon in an effort to stop the fall of the rupee, which will further affect the public and businesses, he said. The rupee has gone down from the limit that was demanded by the IMF, the effects of which can be seen in every sector, including electricity bills, he added.
Dr. Hanif Mughal said in a statement issued here today that if the fall of the rupee is not stopped, businesses will suffer, inflation will flood the country, and poverty will increase. He said that the IMF wants to reduce the value of the rupee by 20% in 2024, but the situation is worsening beyond that, which is worrying. The business community's confidence is currently at its lowest ebb, while negative statements from top officials are fueling the fire.
He noted that interest rates are already at record levels, which have tripled banks' profits. And if it is increased further, industry and trade will suffer tremendously. This will increase unemployment, and the investment, which is already very low, will completely disappear. Due to the depreciation of the rupee, people are buying dollars, which further increases demand for US currency and has a negative impact on the overall situation. Dr. Hanif Mughal said that electricity rates have been increased by 90% in four years, while people are now paying 32% of the bill as taxes, but no action is being taken against those who brought the country to this state.
At the moment, the government is reporting inflation up to 25%, but according to Steve H. Hanke, an American economist and professor of applied economics at Johns Hopkins University, it is actually 50%, which is increasing rapidly. In these conditions, when the industrial sector is falling rapidly and other businesses are struggling to survive, increasing exports to eighty billion dollars is nothing but a political slogan.
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