Recent Events in Pakistan: Inflation Reaches 50-Year High and 20 People Die in Food Stampede within 10 Days

Pakistan’s economy is facing a severe crisis, with inflation hitting 35.37% in March, the highest in nearly five decades. The government is struggling to meet the conditions set by the International Monetary Fund (IMF) to unlock a desperately needed bailout. The country needs billions of dollars of financing to service existing debt, while foreign exchange reserves have dwindled and the rupee is in freefall. Poor Pakistanis are feeling the brunt of the economic turmoil, and at least 20 people have been killed since the start of the Muslim fasting month of Ramadan in crowd crushes at food distribution centers. The South Asian nation must enact tough tax reforms and push up utility prices if it hopes to avoid defaulting and unlock another tranche of a $6.5 billion IMF bailout. Inflation is expected to stay at “elevated” levels, according to the finance ministry, owing to market frictions caused by relative demand and supply gap of essential items, exchange rate depreciation, and recent upward adjustment of administered prices of petrol and diesel.