Anjum Nisar urges govt to curb cost shocks, protect industry, consumers
Islamabad
The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has expressed deep concern over the sharp rise in inflation to 5.6% in September — the highest level in a year — warning that the trend could further weaken purchasing power, erode industrial competitiveness, and derail the fragile recovery of Pakistan’s economy.
BMP Chairman and former FPCCI President Mian Anjum Nisar said the latest figures are alarming, especially as they have surpassed even the finance ministry’s upper projection of 4.5% issued just a day before the official release.
He said the spike in non-perishable food prices, alongside continuing volatility in energy and transport costs, shows that inflationary pressures are structural and not merely seasonal. “This is not just a temporary shock — it reflects deep distortions in our supply chains, weak governance in price control, and the absence of an effective coordination mechanism between the federation and provinces,” he observed.
The Pakistan Bureau of Statistics (PBS) reported last week that inflation accelerated in both rural and urban centers, primarily due to non-perishable food items, while perishable goods slightly eased. Food inflation in urban areas rose to 2.2%, while rural food inflation stood at 1.5%. Non-food inflation, however, remained elevated — touching 5.6% in rural areas and 6.2% in cities. Among key food commodities, sugar prices jumped 29%, butter rose 27%, wheat 17.5%, and wheat flour 13.5%.
Mian Anjum Nisar said such increases directly hit lower- and middle-income households already struggling with high living costs. “When essentials like wheat, sugar, and edible oils rise at this pace, it sets off a chain reaction across the economy. The poorest are forced to cut down consumption, while industries face rising wage and input pressures,” he said. He noted that the recent floods have further strained supply chains, contributing to bottlenecks that are pushing up prices.
He criticized the policy approach that relies heavily on passing fiscal adjustments and IMF-driven reforms onto consumers and producers without sufficient cushioning. “Energy tariffs and indirect taxes are being used as fiscal tools, but the cost is being paid by households and industries. This is neither sustainable nor socially responsible,” he remarked.
The BMP chief warned that the government’s pursuit of fiscal consolidation through energy price hikes and withdrawal of subsidies has pushed inflationary expectations higher. “The recent round of utility tariff increases, coupled with the weakening rupee and higher import costs, is feeding into a new inflationary cycle,” he said. He added that the central bank’s tight monetary policy, though maintaining interest rates far above headline inflation, has not helped lower costs for manufacturers or small businesses.
According to him, the combination of high borrowing costs, rising electricity and gas prices, and imported food inflation is creating a triple squeeze on Pakistan’s industrial sector. “Manufacturers are unable to absorb these shocks. Many are cutting production or delaying new investments. Without targeted relief, we risk a deeper industrial slowdown,” he said.
Mian Anjum Nisar urged the government to immediately reassess its price stabilization strategy and improve coordination between ministries. “Inflation control cannot be left to the State Bank alone. This requires synchronized fiscal and administrative actions — improving market monitoring, managing food imports and exports prudently, and ensuring transparency in utility pricing,” he suggested.
He called for a comprehensive action plan to strengthen food supply chains, invest in cold storage and logistics, and expand agricultural output to curb recurring shortages. “We cannot fight inflation without agricultural reforms. Pakistan loses billions each year due to post-harvest wastage and poor storage, while middlemen continue to profit at the expense of both farmers and consumers,” he said.
The BMP leader also urged that fiscal reforms should be designed to protect the most vulnerable sections of society. “Inflation is not just a number — it is a direct attack on livelihoods. The government must consider targeted subsidies for low-income groups, especially for essential items such as wheat, sugar, electricity, and gas,” he added.
He emphasized that the current inflationary phase could also hurt Pakistan’s external competitiveness. “Rising costs have made our export goods more expensive in global markets. Exporters are already struggling with refund delays, high freight charges, and energy shortages. Without intervention, our trade deficit could widen again,” he cautioned.
Mian Anjum Nisar further pointed out that higher inflation may temporarily boost FBR revenues, but that gain will be short-lived if economic activity slows down. “Relying on inflation-driven tax collection is a dangerous trap. It inflates revenue figures without expanding the real base of taxpayers. The government must focus on efficiency and transparency, not rate hikes,” he said.
The BMP suggested that policy consistency and predictable energy pricing are essential to restore business confidence. “Frequent changes in tariffs and taxes create uncertainty, discouraging both domestic and foreign investors. A stable policy environment with medium-term price targets will help rebuild trust,” he noted.
He also called for a cautious monetary stance from the State Bank of Pakistan, arguing that excessive tightening could further hurt industrial recovery. “The priority should be to maintain price stability without choking investment. Monetary measures must complement fiscal ones, not contradict them,” he added.
The BMP leader warned that unless inflation is brought under control through structural reforms and better governance, Pakistan could face a new cycle of stagflation — low growth combined with high prices. “The government must balance its fiscal goals with social protection and industrial revival. Only then can we achieve stable growth,” he said.
Concluding, Mian Anjum Nisar urged policymakers to make inflation control a national priority rather than a statistical exercise. “We need an inflation strategy built on coordination, transparency, and accountability. The longer this instability persists, the more damage it will do to our industries, exports, and ordinary citizens,” he said.
