Pakistan is facing a severe shortage of flour in Lahore, the country’s second-most populous city. Flour prices have also increased in Islamabad and Rawalpindi. According to Pakistani news outlet ARY News, the hikes have been attributed to mismanagement between the food department and flour mills.
In response, the Shehbaz Sharif government has increased the prices of wheat flour, sugar, and ghee prices by 25% to 62% for sale through the Utility Stores Corporation (USC), except for beneficiaries of the Benazir Income Support Programme (BISP). The limits for subsidised purchases from the USC have also been lowered.
The flour shortage and price increases come as Pakistan’s foreign exchange reserves have reached an eight-year low of over $5.576 billion. The State Bank of Pakistan’s forex reserves have experienced an outflow of $245 million for debt repayments, leading to a significant devaluation of the Pakistani Rupee against the US dollar and other major currencies.
Pakistan’s Finance Minister, Ishaq Dar, confirmed the country’s forex crisis. Dar told investors at a ceremony for the listing of Pakistan’s first development real estate investment trust scheme on the stock exchange, “We’re in a tight position. We don’t have $24 billion in foreign exchange reserves that our last government left in 2016. But that’s not my fault. It’s the system’s fault.”
The State Bank of Pakistan’s ‘State of the Economy for the fiscal year FY22’ report predicts that Pakistan’s growth rate is likely to remain lower than 3% to 4% in FY23. The combination of these economic challenges and the current political instability in Pakistan has raised concerns about the stability and future of the country.
In the midst of these difficulties, the shortages and price increases for staple goods such as flour have had a significant impact on Pakistani citizens. The government’s efforts to address the shortages and provide subsidies for certain populations may provide some relief, but it remains to be seen how effective these measures will be in addressing the larger economic crisis facing the country.
Overall, the situation in Pakistan is complex and multifaceted, with economic and political challenges contributing to a difficult and uncertain environment. The country’s citizens are bearing the brunt of these issues as they struggle with shortages and rising prices for basic necessities.
