Government fears an economic crisis over Omicron’s spread

ISLAMABAD: The federal government has expressed concern over the negative impact on the economy in view of the new variant of coronavirus, Omicron, which could lead to further rise in inflation.

According to the details, the Economic Advisory Wing (EAW) of the Ministry of Finance, in its Economic Update and Outlook Report, said that Omicron has forced economists to rethink possible economic concerns around the world and in this situation, the Pakistani economy cannot be ignored at all.

Furthermore, EAW explained in its report that the reason for inflation in Pakistan is the rise in international commodity prices, exchange rates, weather conditions and the forecasts of economic agents for the economy which give such indications in the future.

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The reason for the steady rise in inflation in recent months is the rising prices of electricity, fuel, house rent, transport and food every year, including large contributors.

The report also points to the possibility of a monthly decline in inflation in December, with global crude oil prices falling sharply. Foreign exchange rates continued to fall, but the government continued its efforts to keep up the price of international goods.

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Although these efforts could help stem the rise in inflation expected in December, contrary to forecasts, it looks like inflation will rise every year but may be lower than the previous month. The month of November saw a 6.4% rise in world electricity prices and a 0.2% drop in other commodity prices.

The report states that the annual fiscal deficit of Gross Domestic Product (GDP) has fallen from 1.7 percent to 1.1 percent. Similarly, if July-October is compared with the previous year, the primary balance has increased from 156 billion to 206 billion.

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