Inflation continues hurting the poor
KARACHI: The headline inflation is less than the previous year’s, yet it continues to hurt ordinary people.
Data shows most important segments of life are still facing higher inflation than the average Consumer Price Index (CPI).
The CPI for July-Dec was 3.7 per cent, but inflation for health, education and other segments directly affecting the lives of ordinary people registered a sharper increase.
The Inflation Monitor for December 2016 issued recently by the State Bank of Pakistan (SBP) showed that the highest and persistent increase was noted in education. The year-on-year increase in December was 11.5pc, which was just below the inflation registered by alcoholic beverages and tobacco that remained 11.6pc. Alcoholic beverages and tobacco are heavily taxed as the government argues that it wants to discourage their consumption.
However, it is astonishing that education, which is a basic right, is becoming costlier each year despite the absence of taxation.
The primary victims of rising inflation in the non-taxed education sector are poor Pakistanis who are unable to afford ever-increasing fees being charged by private-sector schools and colleges.
The report showed that inflation for education in December 2015 was 8.8pc, indicating that the sector remained under the grip of escalating fees and costly books and stationeries.
Health is another important sector that affects millions of Pakistanis who are unable to afford private-sector services. The SBP report indicates that rising prices in this sector are also hurting the poor population as inflation rose to 8.4pc in December 2016 on a year-on-year basis.
Health services in the public sector are not only poor but also extremely limited for 180 million Pakistanis. No big government hospitals have been established in urban or rural areas in the last two decades while old ones remain in bad shape.
Increasing drug prices have further aggravated the situation for the poor and middle classes of the country. The SBP report showed that inflation in this sector in December 2015 was 2.6pc, which means the current fiscal year is more painful for the poor.
Published in Dawn, January 21st, 2017