By Jawad Ahmed ISLAMABAD, May 23 (INP-WealthPK): A noted economic expert has said that the runaway ‘imported’ inflation is not only hurting Pakistan but also major economies of both the developing and advanced countries, and urged the authorities to make such plans that effectively contain inflationary pressures but do not hurt the economic growth. Talking to WealthPK, Dr. Ayyaz Ahmad, a former senior research economist at the Pakistan Institute of Development Economics (PIDE), said that the major source of unabated inflation, which might vary from country to country in terms of its severity, was the economic recovery following the Covid-19 pandemic as demand for commodities rebounded, driving up their prices, and supply chains strained. Food inflation, according to him, is one of Pakistan’s most serious problems today, which cannot be controlled amid the rising oil prices internationally caused by increasing demand and production bottlenecks. Rising oil prices increase the production costs in almost every sector of the economy, leading to spiral in food prices. In Pakistan, the Consumer Price Index-led inflation rate reached 13.37% in April 2022, with an average rate staying at 11.04% since July of the ongoing fiscal year. The annual CPI in the United Kingdom was recorded at 7%, in the United States 8.5% and 7.5% in the Eurozone. In India, it’s 7%, Russia 16.7%, Argentina 52.3% and Turkey 61.1%. The continuing rise in the oil prices is inflating the country’s import bill every month, leading to widening trade deficit as exports do not keep pace with the ballooning imports. The country’s heavy reliance on imported oil and food items has put a strain on foreign exchange reserves, resulting in currency depreciation, as the demand for dollar is ever rising. According to the Pakistan Bureau of Statistics, in April year-on-year, price of tomato registered an increase of 124.68%, mustard oil 61.72%, onions 61.64%, cooking oil 60.07%, vegetable ghee 58.71%, pulse masoor 40.29%, gram whole 30.85%, fruits 30.64%, meat 25.64%, vegetables 19.15%, wheat flour 18.34% and wheat 14.69%. Pakistan could see a second round of inflation if the government increases the prices of petroleum products to help put back on track the stalled Extended Fund Facility of the International Monetary Fund. It was decided in February that prices of petroleum products would be kept unchanged from March through June to give some relief to the people. The overall subsidy for maintaining oil prices unchanged amounted to Rs31.3 billion in March and Rs76 billion in April. The subsidy would jump to Rs90 billion if the government decides to maintain the cap on domestic oil prices in May. In its bid to curb the runaway inflation, the State Bank of Pakistan also increased the benchmark policy rate by 250 basis points to 12.25%. Talking about the dynamics of monetary policy in Pakistan, Dr. Saud Ahmed Khan, an assistant professor at PIDE, told WealthPK that historic evidence showed that tight monetary policy caused inflation to grow substantially rather than decrease. He stressed the need for policymakers to formulate policies that contain inflation without hurting the economic growth. He said the federal and provincial governments should reactivate their price control authorities to prosecute hoarders and profiteers.