Increasing inflation to restrict economic development. The Express Tribune
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday warned officials that inflation rates above 6% could stall economic growth in the post-Corona period and a cautionary strategy to keep inflation under control The need to emphasize.
In a statement, FPCCI President Mian Anjum Nisar said worldwide inflation was recorded at more than 9% in September amid a decline in food and energy prices, against a steady annual inflation rate of 1.2%.
He called for keeping the national economy on a balanced and sustainable development trajectory, and underlying structural weaknesses were low export growth, limited foreign exchange reserves, lack of documentation of the economy and high food inflation were still major challenges.
Nisar said that there was a general consensus that low inflation rates aided economic activity, while high inflation hurt economic growth.
“High inflation affects decision-making by all economic players, such as investors, savers, consumers, and producers through uncertainty about the expected repayment from their decisions,” he said, adding that “persistently high inflation also affects local currency.” Causes a drop in value. In turn, uncertainties have an adverse effect on economic activity. “
The FPCCI chief said that the low inflation helped economic agents to predict the outcome of their economic decisions. “In particular, manufacturers follow their plans to expand the business with more confidence and new investment is expected to yield returns,” he said. Nisar emphasized the need for profit creation on ease of doing business, which required continuous interaction with relevant public shareholders as well as capacity development of major public institutions. He urged the government to come up with an out-of-the-box solution to accelerate economic activity in the country.
The FPCCI president said that the regular rise in oil, gas and electricity rates and the fall in the rupee posed a threat to all sectors of the economy besides making life of the common man pathetic.
Published in The Express Tribune, 18 OctoberTh, 2020.