Shops are closed during a nationwide strike by traders against rising electricity and gasoline prices on September 2, 2023 in Peshawar, Pakistan (AFP/Abdul MAJEED)
Inflation remained high in August in Pakistan where the collapse of the rupee and soaring prices blamed on the IMF bailout led thousands of traders to strike and close up shop on Saturday.
Pakistan was on the brink of default this summer before the International Monetary Fund (IMF) agreed to a bailout deal on the condition that the government cut subsidies that had helped to cushion the cost of living.
According to official data published on Friday, inflation remained at a very high level of 27.4% year-on-year in August, while the evolution over one month shows sharp increases in fuel prices (+8% compared to compared to July), water bills in urban areas (more than 11% increase) or tomato prices (+82%).
Day laborers sit on a sidewalk near closed shops during a nationwide strike by traders against rising prices and inflation, on September 2, 2023 in Lahore, Pakistan (AFP/Arif ALI)
This spike in costs, which is the focus of public anger as the general elections approach, led several markets in Lahore, Karachi and Peshawar to close their doors on Saturday in protest.
“Everyone is participating, because the situation has become unbearable,” merchants’ union president Ajmal Hashmi told AFP. “We’re going to need help, so people can start putting food on the table again.”
Traders wield immense power in Pakistan, and with general elections just months away, the government finds itself faced with the complicated task of maintaining their support while meeting IMF conditions.
Since the agreement signed with the International Monetary Fund, the rupee has crossed the historic threshold of 300 rupees to the dollar, while Islamabad has raised the prices of petrol and electricity, causing widespread discontent.
Shops closed during a nationwide strike by traders against rising prices and inflation, on September 2, 2023 in Lahore, Pakistan (AFP/Arif ALI)
Acting Prime Minister Anwaar-ul-Haq Kakar said on Friday that price increases should be endured because “there is no other option”.
“Using subsidies to reduce the cost of living only postpones the budgetary burden,” he added.
Parliament was dissolved last month in Pakistan, and an interim government has since run the country, pending the next elections, the date of which has not yet been set.
© 2023 AFP
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