The middle class in Khyber-Pakhtunkhwa (K-P) is grappling with the severeimpact of surging inflation, skyrocketing fuel prices, and soaringelectricity costs, mirroring the struggles faced by citizens across thecountry.
The consequences of this economic turmoil are painfully evident, withmarketplaces appearing deserted, devoid of the usual throngs of shoppers.While talking to The Express Tribune, a local trader expressed theprevailing sentiment, stating, “Record inflation has gripped the country,leading people to limit their purchases to essential items, resulting in asignificant reduction in market activity.”
The recent hikes in petroleum and electricity prices have triggered adomino effect, causing prices to surge across the board, affectingeverything from vegetables and sugar to pulses, oil, and ghee. This pricesurge has deterred buyers from visiting the markets.
Traders find themselves in a worrisome predicament, as sales haveplummeted by nearly 70%, painting a bleak picture for their businesses. Therepercussions of this situation are not limited to urban markets; wholesalebazaars are also experiencing a downturn in activity, compounding theeconomic woes of the entire region.
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Prices have spiraled out of control, tripling in just a few short months,effectively erasing the middle class’s purchasing power in Pakistan. Thisdire situation has resulted in the country’s monthly inflation rate,measured by the Consumer Price Index (CPI), surging to an alarming 28.3% inJuly. This figure far surpasses market expectations, which had estimated arate of 26%. The escalation in CPI inflation is particularly concerning foreconomists and policymakers, given that it occurs in the first month of thefiscal year 2024.
Several factors contribute to this sharp increase in inflation, with themost significant drivers being the exorbitant prices of essential fooditems.
