Nonperforming march…. Dr Pervez Tahir

The last complete month of the PTI government was March 2022. This provides the baseline to compare the economic performance of the coalition government by their last complete month which is March 2023. The comparison is incomplete because monthly data is available only for a few indicators. Variations in prices affect most citizens. Information on prices is available not only month-wise but also weekly. Overall inflation and prices thus provide a fair basis of comparison. Even fairer will be a nine-month comparison to overcome the possibility of March being an exceptional month. Consumer Price Index (CPI) is the official measure of the overall rate of inflation. It rose sharply from 12.7% in March22 to 35.4% in March23. It was 10.77% in July21-March22 and 27.26% in July22-March23. For the same nine-month period, Sensitive Price Indicator (SPI) covering the essential items was higher than the CPI, rising from 17.26% to 30.50%. The Wholesale Price Index (WPI) was even higher at 34.15%, compared to 22.27% in July21-March22.

These are unusually high increases that have the potential to feed into public protest. Wages of daily labourer lagged behind, with an increase of only 18% between the last weeks of March 2022 and 2023. The SPI for the lowest income quintile Jumped up by 41.72% in the same period. In 1968, a rise of 25 paisas in the price of sugar led to riots that contributed to the ouster of President Field Marshall Ayub Khan. Before that in the early 1950s, shortage of atta was among the stated causes of the dismissal of Prime Minister Khawaja Nazimuddin. For the first time in Pakistans history, atta is selling at a price higher than sugar. In the week ended on March 22, 2023, the average price of atta per kg was Rs129.32 and that of sugar was Rs106.4. These prices in the corresponding weeks of the previous year, respectively, were Rs58.6 and Rs86.9. In other words, the atta price rose by a massive 120.68% and the sugar price by 22.44%. The gap has persisted since. In the week ending on March 30, 2023, the atta price per kg was Rs131.8 against the sugar price of Rs108.6. In the following week ending on April 6, 2023, atta was sold at Rs135.8 and sugar at Rs123.3. The atta price per kg here is derived from the price of a 20 kg bag. The price of one kg of open atta is even higher. On April 6, the average was Rs153.67, with a range of Rs133.31 in Larkana to Rs179.10 in Islamabad.

Next available information relates to international trade. In July-March 21-22%, exports increased by 24.98% and imports by 49.10%. In July-March 22-23, exports declined by 9.87% and imports declined even higher by 25.34%. While the deficit in trade decreased and contributed to improvement in the current account balance, the impact on large scale manufacturing was devastating as it constrained the import of critical inputs. Data available for seven months (July-January 22-23) shows that large scale manufacturing growth deceased 4.40%. The decrease was widespread affecting twenty major sectors of manufacturing. In comparison, there was an increase of 7.92% in the large scale manufacturing in July-January 21-22.

The promise by the ruling alliance to stabilise the economy before entering into electioneering has turned out to be a nonperforming march of the light brigade. In the ancient Roman calendar, the Ides is not just a day in March. Beware the Ides of April is equally possible. The court is in session. Keep your fingers crossed.

 Courtesy The Express Tribune, April 14th, 2023.