Pakistan’s Finance Ministry is concern about poverty, inflation, food insecurity

The Ministry of Finance of the Islamic Republic of Pakistan has expressed concern over persistent economic challenges, rising poverty, inflation, and food insecurity. 

A day after the national assembly and the federal cabinet were dissolved, the Ministry of Finance said that the country faces five major and persistent economic challenges.

The MoF expressed concern over rising inflation, particularly food inflation, which is the highest in the history of the Islamic Republic of Pakistan. There has been an increase in price for basic items. 

The first quarterly performance report on $1.5bn Building Resilience with Active Country-cyclical Expenditures (BRACE) was released on Thursday. The Finance Ministry lauded the financial progress in the quarter ending December 31, 2022. Reportedly, there has been a 26.4pc increase in non-tax collection, and the tax collection grew 17pc. 

The report highlighted the five persistent challenges, which continue to haunt the national economy. The high fuel prices have affected the economy of Pakistan. The Russian-Ukraine war further impacted the economy. The increase of price for edible oil has also affected the national economy. Reportedly, it is almost double for the poor. Pakistan is mostly dependent on imported palm oil.

Another challenge is rising poverty. Poverty has increased after the flood. It has increased the burden on authorities. Fourth is the persistent challenge of record inflation. The rising inflation, particularly food inflation, has increased burden on people, particularly in rural areas. 

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The 2022 floods also impacted the national economy. The destructive flood in 2022 affected 33 million people and 1.8 million hectares of cropland in Pakistan. It also damaged crops, public infrastructure and private properties. It increased poverty and food insecurity, and worsened diet quality across the country. According to reports, over 4 million acres of agricultural land were destroyed or damaged due to the flood.