Business markets in Northern Pakistan hit by inflation

15 min read

The skyrocketing prices and inflation have forced several local traders including owners of vehicle showrooms to wind up their businesses and leave the country in search of jobs abroad.
Jehan Zeeb, a Non-Custom Paid showroom owner in Bisham recently closed his bargain and left for Kingdom Saudi Arabia to find a job and feed his family as he had lost million of rupees in the business due to financial crises.
Jehan Zeeb’s brother, Abdul Karim also bought a visa for Saudia Arabia to work there as labour and make money to return the borrowed payment of his business partners because he had lost in the Non-Custom-Paid (NCP) car business.
As the current inflation has hit double digits for the first time in almost six year and affected almost everyone daily wagers, traders, pushcart vendors, private sector employees and event farmers.
Laeq Bacha, a showroom manager, said that his business of NCP cars has been at standstill for a year because customers visit him for sale of their cars but the number of purchasers is extremely insufficient.
According to the government record, over 90,000 NCP vehicles had been registered in 2017 in joint adventure of Pakistan Army, Excise and local police.
According to the sources, over 200,000 vehicles in the division are unregistered including the assembled ones also a ban had imposed on assembling of smuggled NCP cars.
The NCP cars showrooms union’s list shows that over 307 showrooms are registered with it and over 1000 people associated with them but nowadays just waiting for customers at their bargains.
Mr Bacha, added due to surge in petrol prices people cannot keeps cars but trying to sale out their cars as the financial crises has made the life of every countryman difficult, a middle class hardly earn to feed his family.
Common Man:
A daily wager, pushcart vendor, labour either roaming in search of work or earn less than his required budget for livelihood of family Rs 500 daily wage though Rs 1050 is required for purchase of a 20KG flour bag.
“I have worked with a contractor in a school construction on Rs 700 daily wage but a week ago he stopped work at the site because shortage of funds with the government department due to which I am in search of work but failed to find in a week,” Namos Khan, a daily wager, said.
He said, after certain increase in the Iron, cement and daily use commodities people have stopped construction work.
Muhammad Rabi, a pushcart vendor, sale corn, peanuts along the KKH in Bisham, told that peanuts, corn rates surged double digits as he had bought the peanuts bag on Rs 1400 previous year but last month he bought it on Rs 1900.
He said, rates increased as average Rs 100 per KG including Jaggery, Corncob and roasted Gram.
Tariq Khan, A Nanbai (Baker) termed 2019 the worst year for his business, says the government rose the 84 KG flour bag from Rs 3000 to Rs 5000 also the cylinder he used for backing from Rs 1400 to Rs 2150 this year which caused him a heavy loss.
Similarly, Muhammad Umar Khatak, a trader in Bisham, informed the rates surged on average Rs 500 per bag of flour, Rs 100 Lentils and beans Rs 200 Ghee comparatively previous year.
He claimed his business is going in the loss like last year he has sale approximately Rs 20,000 in a day but this year it reduced to Rs 10,000 and customers borrowed goods and now reluctant to return payment which has destroyed his trade.
Inflation, measured through the Consumer Price Index (CPI), edged up by 0.77pc over the previous month after PBS revised its calculation methodology. inflation came in at 11.37pc, versus 10.49pc in the previous month of

Going by the old base year of FY08 that was being used until two months ago, the key inflation index comes in at 12.55pc for September, showing a 0.92pc increase over the month of August.

As per the new base year, lowest CPI was recorded in July at 8.4pc which grew to 11.37pc in September.
As per data, the urban CPI covers 35 cities and 356 consumer items while rural tracks 27 rural centres and 244 items. The former grew by 11.6pc year-on-year in September whereas the latter jumped by 11.1pc.

The International Monetary Fund has estimated that Pakistan’s inflation may escalate up to 13pc. However, the government’s estimate is around 11pc, which is already been crossed in the outgoing month.

Further analysis show that the food inflation in urban areas rose by 15pc in September on a yearly basis and 2pc month-wise. In rural areas, food inflation rose 15pc on yearly and 1.8pc on monthly basis.
Similarly, non-food inflation in urban centres was recorded at 9.7pc year-on-year while in rural areas it was at 8pc.
In urban areas, the food items which saw their price levels go up included: chicken (40.75pc), tomatoes(37.47pc), onions (32.31pc), fresh vegetables(12.84pc), eggs (9.76pc), potatoes(6.21pc), cooking oil (4.68pc), vegetable ghee (4.18pc), motor fuel (3.88pc), sugar (3.78pc), daal masoor (2.54pc), mustard oil (1.75pc), pulse gram (1.44pc), wheat flour (1.29pc) and daal mash(1.01pc).
In the rural areas, items that witnessed inflation increase included tomatoes (35.4pc), onions (28.49pc), chicken (26.56pc), potatoes (18.18pc), fresh vegetables (10.96pc), eggs (9.79pc), sugar (5.21pc), cooking oil (3.22pc), daal moong (2.81pc), vegetable ghee (2.51pc), daal mash (2.35pc) and milk powder (1.85pc).
The average inflation was 3.92pc in financial year 2017-18 and 4.16pc the year before.
Furthermore, the impact of fuel prices was also felt on most food items, as retailers passed on the impact of higher transportation cost to consumers. This impact was more pronounced in case of milk, vegetables and meat.
Sher Ali, a cab driver, said double-digit increase in petroleum products has badly affected his job first they used to take Rs 450 per passenger from Bisham-Swat and now after surge in petroleum products they charge Rs 550 each passenger but despite that going in loss, on the other hand, government is trying to impose its own rates but don’t think could continue the cab services.
Cab driver, added petrol jumped to Rs 118 per liter comparatively previous year Rs 67 but cab services surged just Rs 100 per passenger.
Khalid Khan, a heavy machinery businessman, told this scribe that government and non-government projects either closed or facing funds shortage which resulted heavy loss to him and his business is going in deficit first time since he started.
The trader, explained that rates of every machines have been doubled as a kind of drilling machine he had bought in Rs 48,000 in 2018 purchase this year in Rs 70,000 from the market in Lahore.
He said, Pakistan-China multi-billion dollar’s projects also taking machines and tools on loan.
Financial crises has made life difficult for the people of rural areas of Northern Pakistan as prices of daily use necessities has hit double digits during last 13 months and forced people to leave abroad to cope with inflation.
Haider Khan, an economist, said Inflation affects the whole social framework of society including economy of the country, production and political environment. Inflation is a deadly disease for developing economies as it imposes high cost on economies and societies.
People have also switched their businesses and even closed their businesses in which they have lost millions of rupees.
Rasool Khan, said when the fuel prices surged the vehicles prices fell down due to which he lost over 10 million rupees and now he left the business and limited to his home in Bisham.
“After heavily loss in the cars business my business partners from who I had bought the cars knock my home door regularly and asking their money but my payments also stuck with others to those I sold the cars,” He Said.
Increase of prices of petroleum products is one of the reasons behind inflation as goods transported in trucks to northern Pakistan from major cities and transporters increased their transportation charges with increase of fuel prices.
Additional Deputy Commissioner Shangla, Maqbool Hussain, said that they have set up 18 points for subsidies flour meant to control shortage of flour and ensure provision of flour on government fixed rates.
He added that as 70 percent of local people associated with coalmines business and work as daily wager at different parts of the country, while poverty level is high in the district for which they are striving to establish Sasta bazaars in the every edge of the district and also discouraging hoarder, conducts raids against violators, however overall inflation is not in the administration control.

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