ISLAMABAD (ABC) – Pakistan is grappling with inflationary challenges that threaten to undermine its growth prospects and exacerbate socio-economic disparities. By learning from China’s supply-side reforms and adapting them to its context, Pakistan can achieve sustainable economic development, Dr Liaquat Ali Shah, Head of Policy at the Centre of Excellence for CPEC, told WealthPK.
He said persistent inflationary pressures had significantly diminished the people’s purchasing power and strained household budgets. Rising food prices is a primary driver of inflation. Other factors contributing to inflation include the escalating energy costs, supply chain disruptions, fluctuating global commodity prices, and structural inefficiencies in the economy. Mitigating these challenges necessitates a combination of short-term measures and long-term structural reforms.
“China’s profound supply-side reforms have strengthened its economic resilience and inspired other nations, including Pakistan. Learning from China’s experiences can offer valuable insights for Pakistan, particularly in prioritizing strategic sectors, implementing export-led growth, and adopting targeted industrial policies to enhance competitiveness,” he said.
He also highlighted the imperative for Pakistan to emulate China’s strategy and reduce reliance on specific countries or products. By diversifying imports, Pakistan can effectively buffer itself against supply disruptions and mitigate the adverse effects of price fluctuations on its economy.
He said, “Drawing lessons from the experiences of other nations to achieve specific development objectives presents inherent challenges, as countries differ in cultural contexts, geopolitical landscapes, and resource mobilization capabilities.”
“Pakistan faces its own set of economic challenges, including issues related to governance, infrastructure, and industrial development. By carefully analysing and adapting these lessons, Pakistan can strengthen its policy frameworks, enhance economic resilience, and ultimately advance towards its development goals,” he said.
According to the latest data released by the Pakistan Bureau of Statistics, the Consumer Price Index (CPI) inflation data in February 2024 revealed intriguing trends. The inflation increased to 23.1% on a year-on-year basis in February 2024 as compared to an increase of 28.3% in the previous month and 31.5% in February 2023. On a month-on-month basis, no change was observed in February 2024 as compared to an increase of 1.8% in the previous month and an increase of 4.3% in February 2023.