The Ministry of Finance said on Thursday.
“Inflation Pressure increases as international oil prices are significantly higher.”
An increase in Oil prices directly causes inflation and diminishes economic growth. In terms of inflation, oil prices directly affect the prices of goods made with petroleum products.
Owning to significant instability in oil prices, the Finance Ministry has decided to maintain equilibrium. Increases in oil prices can shrink the source of other goods because they intensify the costs of producing them.
The government is enchanting all potential measures to bring price permanence hence the pace of inflation has been slowed down.
In a monthly economic report, the ministry of finance said,
“Consumer price index (CPI) based inflation increased by 11.1 percent on a year-on-year basis in April 2021 as compared to an increase of 8.5 percent in April 2020, mainly due to an increase in prices of food items and clothing and footwear.”
In the international market, prices of palm oil and soybean oil prices have increased during the last year.
General Statistics proclaims,
“Palm oil prices have risen from $609/metric ton to $1,075/metric ton in April 2021, registering an accession of 76.5 percent. Furthermore, soybean oil prices have grown from $680/metric ton to $1,202/metric ton, conferring inflation of 76.8 percent. Crude Oil prices have progressed from $23.3/barrel to $64.8/barrel, pointing to an increase of 168 percent. Prices of tea in the international market have grown from $2,350/metric ton to $2,640/metric ton, showing an accession of 12.3 percent.”
Inflation augmented from 9.1 percent in March 2021 to 11.1 percent in April 2021. The fluctuation in prices came from strong increases in international food and oil prices.
The Finance Ministry said.
“This growth symbolizes that financial compensation has not only commenced but based on the influential macroeconomic pointers, Pakistan is on the route of sustainable germination. The reliance of investors has been reconstructed due to pro-business management and superior structural variations are in the limit.”
The ministry of finance said there is an extraordinary risk connected to the third movement of the pandemic which has entirely disturbed the economic sectors.
However, it has taken appropriate measures to mitigate it. Finance Ministry constituents’ body to bring Sugar, Oil prices down.
Sources
https://www.frbsf.org/education/publications/doctor-econ/2007/november/oil-prices-impact-economy/
https://www.investopedia.com/ask/answers/06/oilpricesinflation.asp
https://www.annualreviews.org/doi/pdf/10.1146/annurev.eg.10.110185.001533
