The headline inflation in Pakistan has accelerated to 9.04 percent in September 2020. This acceleration is faster than the 8.2 percent reading of August 2020. The most worrying fact about inflation is that rural inflation has increased much faster than urban inflation. Food inflation remained 14.74 percent against 12.89% of last month. The CPI basket reveals that on average each Pakistani spends 34.58% of his income on food and beverages therefore, this inflation has more dire consequences for a common man.
The share of food expenditure can vary between rich and poor. Poor household spend a major portion of their income on food items. An increase in food prices, therefore, erodes their ability to purchase essential goods for survival. Unstable food prices create malnutrition and starvation and contribute to poverty and low productivity. The provision of basic food items, therefore, should be the key responsibility and a focal point of the economic policy of the government.
The prices of all goods and services are determined by demand and supply forces. Government regulate this process and ensure that no seller with its monopoly power can manipulate this process. The supply of perishable commodities such as chicken, eggs and vegetables are very much sensitive to its prices. The supply and prices of theses commodities chase each other in the short run. The government, therefore, cannot regulate prices of theses commodities however, it should remove any bottleneck in the supply chain by curbing monopolies and hoarding.