Government Urged to Act as Short-Term Inflation Pressures Persist

By Muhammad Shahzad
Lahore, Pakistan
LAHORE: The Pakistan Industrial and Traders Association Front (PIAF) has urged the government to take immediate policy measures to ease rising costs for businesses and consumers, warning that short-term inflationary pressures continue to strain the economy.
PIAF Chairman Faheemur Rehman Saigol, along with Senior Vice Chairman Nasrullah Mughal and Vice Chairman Tahir Manzoor Chaudhary, said industry-friendly policies are essential to sustain economic growth while keeping prices of essential commodities under control.
Addressing a press briefing, Saigol said rising energy prices and higher costs of staple food items are putting significant pressure on both households and traders. “Short-term inflation driven by gas, wheat flour, and sugar remains a serious concern. Coordinated government and private-sector strategies are needed to protect livelihoods and stabilize markets,” he said.
Nasrullah Mughal said PIAF’s proposals, formulated in consultation with chambers of commerce and industrial forums, focus on tax rationalization, energy cost management, and investment facilitation. Tahir Manzoor Chaudhary warned that without coordinated policy action, increasing production and utility costs could negatively impact industrial output and employment.
According to data released by the Pakistan Bureau of Statistics (PBS), the Sensitive Price Indicator (SPI) rose 2.83 percent year-on-year (YoY) for the week ending December 24, 2025. On a week-on-week (WoW) basis, the SPI declined marginally by 0.09 percent, suggesting limited short-term relief in the prices of essential goods.
Of the 51 items monitored under the SPI, prices of 13 items increased, 11 declined, and 27 remained unchanged. However, sharp YoY increases in gas charges (29.85%), wheat flour (22.56%), sugar (16.32%), beef (13.01%), gur (12.46%), and bananas (11.24%) contributed significantly to overall inflationary pressure.
Some relief came from falling prices of perishable vegetables, with tomatoes down 74.92 percent, potatoes 49.79 percent, garlic 38.17 percent, and onions 29.23 percent YoY. Prices of tea, pulse mash, pulse masoor, electricity charges, and LPG also declined, helping to partially offset inflationary pressures.
Analysis across income groups shows YoY inflation ranging from 1.35 percent for the lowest-income households to 2.56 percent for the highest-income group, indicating that inflation, while moderate, continues to affect all segments of society.
Economists estimate that Consumer Price Index (CPI) inflation for December 2025 could reach around 6 percent, with food inflation at 4.4 percent YoY, largely due to declining vegetable prices. Housing, gas, and electricity costs are projected to rise 1.4 percent month-on-month, potentially pushing headline inflation closer to 5.7 percent if current trends persist.
Saigol emphasized the need for a dual approach combining short-term relief with long-term structural reforms. He said energy and utility costs remain the most pressing challenge for manufacturers and traders, adding that improved energy management and regulatory coordination could help reduce production costs.
Tahir Manzoor Chaudhary highlighted that small and medium enterprises (SMEs), the backbone of Pakistan’s economy, are particularly vulnerable to price volatility in commodities and energy. Without decisive intervention, he warned, rising costs could dampen investment, restrict exports, and slow economic recovery.
Economists caution that while recent declines in vegetable prices offer temporary relief, persistent increases in wheat, sugar, and gas prices mean inflationary pressures are unlikely to ease without proactive government measures. PIAF said its engagement with policymakers would continue in the coming weeks to align fiscal and energy policies with market realities.
As Pakistan moves into 2026, businesses and consumers alike will be closely watching whether government action can strike a balance between cost containment, economic growth, and industrial competitiveness—echoing PIAF’s call for a coordinated and collaborative approach to inflation management.