High inflation dampens Ramzan spirits, Pakistani shoppers feel the pinch

With the fasting month of Ramadan set to end in just days, cash-strapped Pakistani shoppers are feeling the pinch of decades-long inflation as they struggle to buy items considered Eid essentials due to high prices.

Typically, during the last week of Ramadan, Pakistani families flock to markets and shopping malls in search of new clothes, shoes and jewelry. However, commodity prices have almost doubled since last year as Pakistan grapples with a severe economic crisis.

Eid-ul-Fitr, which marks the end of Ramzan, is scheduled to take place in Pakistan on April 10, depending on the appearance of the new moon.

Mohammad Fawad, a local shopkeeper, said people were buying only one item compared to four last year due to rising prices.

“Prices have increased more than four to five times since last year. People’s purchasing power can be measured by the fact that people who could buy four items last year only buy one this year,” he said.

“A person with children only buys things for his children, he doesn’t shop for himself. You could say prices change faster than dates. Dates change more slowly. That’s how bad the situation is,” he added.

Last May, Pakistan’s annual inflation rate hit a record 38%. Inflation has since declined but remains in double digits. According to Pakistani media reports, the inflation rate in March this year is currently 20.68%, lower than 23.10% in February.

A housewife who bought clothes at the market said the prices were “exorbitant” despite bargaining with shopkeepers.

“I have bought some clothes so far but they cost us too much. The prices are too high. We have tried bargaining but they have only reduced the price by a small amount,” she said.

Ahmed Mogul, a resident of Lahore, echoed similar sentiments, saying: “Inflation is very bad. There is no doubt that things are too expensive. But obviously we have to buy things for our children. It is impossible. Avoided.”

IMF provides $1.1 billion package to Pakistan

Earlier on Wednesday, the International Monetary Fund (IMF) said the global lender had reached a staff agreement with Pakistan to release $1.1 billion to boost the country’s struggling economy.

The announcement came after a team from the International Monetary Fund held talks with the Shehbaz Sharif-led government in Islamabad last month.

The International Monetary Fund said in a statement that Pakistan’s “economic and financial conditions have improved” in recent months. However, the global lender expects growth to be moderate this year.

“Sustained policy and reform efforts are needed to address Pakistan’s deep-seated economic vulnerabilities, amid ongoing challenges posed by increased external and domestic financing needs and an unstable external environment,” the IMF added.

Pakistan’s foreign debt exceeds US$130 billion and its foreign exchange reserves are only US$8 billion. According to Al Jazeera, the country’s currency has depreciated by more than 50% against the US dollar in the past two years.

(With information from Reuters)

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