Spike in house rent, education expenses fuelling inflationArchive
KARACHI: Overburdened middle and lower-middle classes have been facing a sharp rise in house rent, education, medical and motor fuel expenses.
The latest Inflation Monitor released by the State Bank of Pakistan (SBP) reveals that house rent was the top contributor to inflation. It has the highest weight (21.8 per cent) in the Consumer Price Index (CPI). Its weighted contribution rose to 27.05pc in April.
The year-on-year increase in inflation for house rent was 6.94pc. One reason for increasing house rent is the high cost of land and housing units as the need for homes grows every year. The gap between the demand and availability of housing units has already crossed eight million.
Unchecked prices are keeping a large segment of population away from the housing market. Even the smallest units now cost Rs10-13 million as housing prices get beyond the reach of middle and upper-middle classes. High prices of housing units translate into rising house rent, which increases each year. It rose 5.37pc in April last year.
Education also registered notable inflation last month, particularly for the middle and lower-middle classes. It jumped 12.5pc year-on-year in April. Tuition fees rose and the prices of books and stationery also increased. Private schools are seldom held accountable for increasing tuition fees. The provincial government keeps announcing that it is going to control hikes in school fees. But it never takes any serious step to check the practice.
Prices of medicines also showed an increase last month. According to the SBP’s document, inflation for drugs was 20.8pc in April. Health facilities are already poor in most parts of the country. Many people who cannot afford to visit a doctor opt for self-medication. The increase in drug prices has further aggravated the situation. Prices of some life-saving drugs have gone up 100-200pc.
The report shows that doctors who ran private clinics increased their consultancy fees by 7.9pc in April year-on-year. Prices of medical equipment also rose 7.9pc, the SBP document showed.
Published in Dawn, June 1st, 2017