Double whammy for Pakistan: High food and fuel prices could trigger protests amid devastating floods

The overall situation has been becoming increasingly turbulent in India's neighbourhood Pakistan. As the devastating floods have left a trail of destruction in the backdrop of consistent rise in food and fuel prices, these factors could lead to protests and instability in the country, warned the International Monetary Fund (IMF).

Pakistan's inflation recently hit a 47-year-high in August at over 27 per cent. "High food and fuel prices could prompt social protest and instability," The News quoted the IMF as saying in an executive summary of the seventh and eighth reviews, released under the Extended Fund Facility (EFF).

The report highlighted that risks to the outlook and programme implementation remain high amidst present challenges.


It said that the repercussions of the Ukraine war will weigh high on Pakistan's economy through rise in food and fuel prices. The report also shed light on Pakistan's complex political scenario and uncertainty, which is the result of powerful vested interest and has dealt a severe blow to its economy over a period of time, The News reported.

Besides the threat of protests, there would be a surge in socio-political pressures, which will further deteriorate Pakistan's stanance in terms of implementing policy and reforms, considering the current political situation, it said.

"All this could affect policy decisions and undermine the program's fiscal adjustment strategy, jeopardising macro-financial and external stability and debt sustainability," it added.

The IMF said substantial risks stem from higher interest rates, a larger-than-expected growth slowdown, pressures on the exchange rate, renewed policy reversals, weaker medium-term growth, and contingent liabilities related to state-owned enterprises (SOEs).

Pakistan govt raised fuel prices: Breaking common man's back
As the floods continue to batter Pakistan, things are getting more difficult than ever for an average Pakistani due to a constant surge in fuel and food prices and now it has become nearly impossible to make ends meet.

Running short of options, the Shehbaz Sharif government further raised prices of petroleum products in Pakistan with Rs 3 per litre despite a decline in global oil rates.

The obvious reasons behind the hike are the exchange rate fluctuation and Pakistan's commitment with the International Monetary Fund (IMF), attached with the bailout loan programme.

According to the latest notification issued by the Finance ministry of Pakistan government, per litre price of petrol has been increased by Rs 2.07, high speed diesel (HSD) by Rs 2.99, kerosene by Rs 10.92 and light diesel oil (LDO) by Rs 9.79.

Lately, prices of vegetables have also shot up by more than 100 per cent in Pakistan and the outlook further darkened by the catastrophic floods.