A long way to go

Pakistan’s yearly consumer inflation rate stood at 29.7 per cent in December 2023, which means that those who earned Rs100,000 per month needed Rs 129,700 to maintain their lifestyle at a year-ago level. Obviously, most individuals and households had no opportunity to make the additional Rs29,700. Inflation numbers don’t tell us about their sufferings, let alone the sufferings of the jobless. We come to know about those sufferings in our daily interactions with such people. According to the International Labour Organisation, there were no less than 5.6 million unemployed people at the end of December 2023. The State Bank of Pakistan (SBP), determined to bring down the inflation rate in the range of 20-22pc, has no option but to continue its tight monetary policy, which means interest rates will remain high. With the central bank’s key policy rate at 22pc, effective interest rates for most private sector borrowers remain close to 25pc. Can businesses grow amidst this high-interest rate environment? The answer is obvious: most of them cannot.