Monday, November 8, 2021

Global Food Security Index 2021: Food in Pakistan More Affordable Than India, Bangladesh, Nepal

Food is more affordable in Pakistan than in Bangladesh and India, according to the Global Food Security Index 2021. Earlier in 2021, Global Hunger Index report also ranked Pakistan better than India. Numbeo Grocery Index reports that the food prices in Pakistan are the second cheapest in the world. 


Global Food Security Index 2021. Source: Economist



Global Food Security:

Pakistan (with 52.6 points) has scored better than  Bangladesh (48.8), Nepal (48.3) and India (50.2 points) in terms of food affordability.  Sri Lanka scored higher with 62.9 points in this category on the GFS Index 2021,  according to a global report released by Economist Impact and Corteva Agriscience recently. 

Ireland, Australia, the UK, Finland, Switzerland, the Netherlands, Canada, Japan, France and the US shared the top rank with the overall GFS scores in the range of 77.8 and 80 points on the index. 

In overall food security, Pakistan ranked 75th with a score of 54.7, ahead of Sri Lanka (77), Nepal (79) and Bangladesh (84), but behind India ranked 71st with a score of 57.2 points on the GFS Index 2021 ranking 113 countries.

Pakistan improved its GFS score by 9 points (to 54.7 in 2021 from 45.7 in 2012) while India’s score improved only by 2.7 points to 57.2 in 2021 from 54.5 in 2012.  Nepal improved by 7 points (to 53.7 points in 2021 from 46.7 points in 2012) and Bangladesh by 4.7 points (to 49.1 in 2021 from 44.4 points in 2012). China’s score improved by 9.6 points to 71.3 in 2021 from 61.7 in 2012, the report said. “The GFSI looks beyond hunger to identify the underlying factors affecting food insecurity around the world,” said Tim Glenn, Executive Vice-President and Chief Commercial Officer, Corteva Agriscience.

The cost of living in Pakistan is the world's lowest despite recent inflationary trends, according to the Cost of Living Index for mid-2021 as published by Numbeo.  Numbeo Grocery Index reports that the food prices in Pakistan are the second cheapest in the world. 

History of Inflation in Pakistan. Source: Statista



Global Hunger Index:

Global Hunger Index 2021 report has ranked Pakistan 92nd, ahead of India ranked 101st among 116 countries.  Pakistan's other South Asian  neighbors are ranked better: Nepal (76), Bangladesh (76), Myanmar (71). 

Hunger Trends in South Asia. Source: Global Hunger Index 

Pakistan has been reducing hunger at a faster rate than India but slower than other South Asian neighbors like Bangladesh and Nepal. It is notable that Pakistan's minimum monthly wage of US$491 in terms of purchasing power parity is among the highest in developing nations in Asia Pacific, including Bangladesh, India, China and Vietnam, according to the International Labor Organization

Monthly Minimum Wages Comparison. Source: ILO




COVID-Induced Inflation: 

Global supply-chain disruptions and economic recovery from COVID19 pandemic have driven up prices of all commodities, including food and fuel, worldwide. 


Summary: 

Food and fuel prices in Pakistan are among the lowest in the world. However, everyone is feeling the pinch of rising global prices. It is particularly painful for people in developing countries like Pakistan. These prices are beyond the control of any one national government. What governments like Pakistan can and should do is to protect the poorest and most vulnerable people in their countries. Prime Minister Imran Khan's plan to deliver targeted food subsidies worth $700 million should help reduce the pain. This $700 million package of targeted subsidies is in addition to more than a billion dollars distributed to the indigent families under the Ehsaas program.  

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers

Naya Pakistan Housing Program

Food in Pakistan 2nd Cheapest in the World

Pakistan's Pharma Industry Among World's Fastest Growing

Pakistan to Become World's 6th Largest Cement Producer by 2030

Pakistan's 2012 GDP Estimated at $401 Billion

Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

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Can Pakistan Effectively Respond to Coronavirus Outbreak? 

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Conspiracy Theories About Pakistan Elections"

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30 comments:

Riaz Haq said...

Bangladesh’s monthly minimum wage lowest in Asia-Pacific region: ILO
Neighbouring country Pakistan topped the chart in South Asia with a monthly minimum wage level of $491, while India has the second lowest minimum wage level of $215

https://www.tbsnews.net/economy/bangladeshs-monthly-minimum-wage-lowest-asia-pacific-region-ilo-166438

The monthly minimum wage level in Bangladesh was $48 or around Tk4,070 in 2019 – the lowest among all nations in Asia and the Pacific region, reveals the Global Wage Report 2020–21.

Published by the International Labour Organization (ILO) on Wednesday, the report calculated the "Gross Monthly Minimum Wage Levels in Asia and the Pacific" using the Purchasing Power Parity (PPP) values.

Globally, Bangladesh ranked fifth from the bottom among 136 countries. Neighbouring country Pakistan topped the chart in South Asia with a monthly minimum wage level of $491, while India has the second lowest minimum wage level of $215 in the region, it says.

In the Asia and the Pacific region, the median (average) minimum wage is $381, which is $333 or around Tk18,250 higher than that of Bangladesh. However, the ILO report excluded agriculture and domestic workers while calculating Bangladesh's monthly minimum wage level.

Commenting on the matter, Policy Research Institute's Executive Director Dr Ahsan H Mansur said, "Actually, minimum wage is only applicable to Bangladesh's garments sector, and it has no application in any other ones. Elsewhere, the minimum wage is even lower.

"So, the report is not a real reflection of the true picture, and if the minimum wage is increased artificially, it would not be very beneficial at all. If we increase the minimum wage level only in a particular segment and exclude the whole economy, there will not be any positive."

He added that Bangladesh does not have a minimum wage level in every sector and for every job, so the comparison made by the ILO is not appropriate.

Additionally, the report mentions that Bangladesh's actual monthly minimum wage was only $18 last year.

In the region, Australia has the highest monthly minimum wage of $2,166 in terms of PPP, followed by New Zealand with $2,126 and South Korea with $2,096.

What is the situation in South Asia?

Nepal is following the chart-topper Pakistan with a minimum wage level of $396 in this region, and Afghanistan is just behind Nepal with $306.

At the bottom end, Bangladesh and India is followed by Sri Lanka, which has the third lowest minimum wage level of $247 in the South Asia region.

Bangladesh revises the minimum wage every five years and last did it in December 2018. The report mentions that out of 149 countries, only Bangladesh and Angola have not yet made any schedule for the next adjustment of the minimum wage.

About the issue, Dr Mansur said, "Amid this Covid-19 crisis and the ongoing export situation, if the minimum wage is increased now, unemployment may rise further. Instead, we should focus on increasing our labour productivity.

"Productive workers can get an annual pay rise automatically."

Globally, the median value of gross minimum wages for 2019 is $486 per month, indicating that half of the countries across the globe have minimum wages set lower than this value, and half have minimum wages set higher.

Largest decrease in real minimum wage

Bangladesh has seen 5.9% decrease in real minimum wage growth annually, from the period between 2010 and 2019. This was the largest decrease in Asia and the Pacific region.

Meanwhile, the neck and neck RMG export competitor Vietnam (11.3%) observed the highest increase of real minimum wage growth.

Addressing the issue, Dr Mansur said, "This is not desirable and a matter of deep concern too."

On a separate note, the annual labour productivity growth increased by 5.8% in Bangladesh, compared to 5.1% of Viet Nam for the same period.


Rashid A. said...

Comparing Inflation alone is not sufficiently. Also compare the impact of inflation. Quickly from World Bank:
Country. GDP/Capita Inflation
(Current US $)
Sri Lanka: $3682, 6.2 %

Bangladesh: $1968, 5.7 %

India: $ 1900, 6.6%

Pakistan: $1193, 9.7%

Nepal: $1155. 5.1%



All data for year 2020

All from World Bank

GDP per capita (current US$) - Pakistan | Data



Inflation, consumer prices (annual %) - Pakistan | Data


Anybody who says things are better than other countries is simply whistling by the grave yard.
Regards,

Riaz Haq said...

Rashid: "Comparing Inflation alone is not sufficiently. Also compare the impact of inflation. Quickly from World Bank:
Country. GDP/Capita Inflation"

Averages are highly deceptive.

It's important to take income inequality into account.

That's what determines affordability reported by the Global Food Affordability Index.

Inequality in Pakistan is the lowest among the countries you have cited.

https://worldpopulationreview.com/country-rankings/gini-coefficient-by-country

Minimum monthly wage in Pakistan ($491) is the highest among these countries as reported by the International Labor Organization.

https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_762534.pdf

Riaz Haq said...

Pakistan's monthly minimum wage is $491, slightly higher than the global median of $486, according to the ILO Global Wage Report 2020-21.

https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_762534.pdf

Rashid A. said...

Let us not forget that Pakistan
GDP growth is lowest in the region, and gdp/person has intact gone down since 2018.

The income inequality argument is made quite often, but it is also important to remember that the accuracy and reproducibility of various data (GDP, Inflation, and this inequality) is not the same. Not all statistics are of same quality.

When I was in Dam Safety, there was one retired engineer, who would try to prove a dam is safe or unsafe by pointing to the unreliable nature of other side’s data and it’s quality.

Are the effects of high inflation, decreasing income, all neutralized by these algorithmic, massaged, indexes?

The no. of people living below the poverty line has increased to about 40%. About 2M more people have gone below poverty line.

If one truly needs to go deeper, one should find what percentage of income is spent on food? If a huge portion of income is spent on food, then food inflation will take a bigger bite out of budget for health and education. Of course the inflation in health care and pharmacy segment is much worse.

Riaz Haq said...

Rashid: "Let us not forget that Pakistan
GDP growth is lowest in the region, and gdp/person has intact gone down since 2018."

Pakistan’s economy is at least double of what is officially reported. It was last rebased in 2005-6 while India’s was rebased in 2011 and Bangladesh’s in 2013.

Just rebasing Pak Economy will result in at least 50% increase in official GDP.

A research paper by economists Ali Kemal and Ahmad Wasim of PIDE estimated in 2012 that Pak economy’s size then was around $400 billion.

All they did was look at the consumption data to reach their conclusion. They used the data reported in regular PLSM surveys on actual living standards.
They found that a huge chunk of Pak economy is undocumented.

https://www.southasiainvestor.com/2012/11/pakistans-2012-economy-estimated-at-401.html

Even a casual observer can see than living standards in Pakistan are higher than those in Bangladesh and India.


https://www.riazhaq.com/2017/05/comparing-ownership-of-appliances-and.html

Riaz Haq said...

Pakistan Living Standards Measurement Survey (PSLM/HIES) of 2018-19 has revealed that the incomes of the poorest Pakistanis are rising much faster than those of their richest counterparts. The survey measures changes in incomes, expenditures and living standards of the population by quintiles on a periodic basis. The survey provides detailed outcome indicators on education, health, population welfare, housing, water sanitation and hygiene, information communication and technology (ICT), food insecurity experience scale (FIES) and income and expenditure.


PSLM/HIES 2018-19 compares incomes with those reported in PSLM/HIES 2015-16. It shows that the average household monthly income in Pakistan has jumped 16.5% to Rs. 41,545. It also shows that the average monthly income of the lowest quintile (Q1) in Pakistan rose 17.5% and that of the second lowest quintile (Q2) grew 22%, significantly faster than 11.7% for the middle quintile (Q3) and 12% and 5.1% for the top two quintiles (Q4 and Q5) respectively.

The average monthly income of Q1, the poorest quintile, stands at Rs. 23,192 in 2018-19. The second-lowest quintile’s income is Rs. 29,049. The middle-income group (Q3) is Rs. 31,373. The higher middle-income group’s average monthly income has increased to Rs. 37,643. The average monthly income of the top income group (Q4) is estimated at Rs. 63,544.

https://www.riazhaq.com/2020/04/pakistan-plsmhies-incomes-of-poorest.html

Riaz Haq said...


From: DesPardes
@despardes

Families in #USA suffer #Petrol , #Food & groceries price hikes amid #global #inflation #SupplyChain disruption due to #COVID19 and post-situation

https://twitter.com/despardes/status/1457937883361390595?s=20

Riaz Haq said...

#US #inflation hits 30-year high of 6.2%. Higher #food and #energy prices—driven up by #COVID19 #pandemic-related production problems as well as by weather and geopolitical factors—are also adding to the upward pressure on inflation. https://www.wsj.com/articles/us-inflation-consumer-price-index-october-2021-11636491959?st=v8kwij9rc2aktau&reflink=desktopwebshare_twitter via @WSJ

U.S. inflation hit a three-decade high in October—rising at a 6.2% annual rate—as pandemic-related supply shortages and continued strength in consumer demand continued to push up prices.

The Labor Department said the consumer-price index, which measures what consumers pay for goods and services, increased at the fastest annual pace since 1990. Inflation also topped 5% for the fifth straight month.

The so-called core price index, which excludes the often-volatile categories of food and energy, in October climbed 4.6% from a year earlier, higher than September’s 4% rise and the largest increase since 1991.

On a monthly basis, the CPI increased a seasonally adjusted 0.9% in October from the prior month, a sharp acceleration from September’s 0.4% rise, and the same as June’s 0.9% pace.

Price increases were broad-based in October, with higher costs for new and used autos, energy, furniture, rent and medical care, the Labor Department said. Prices fell for airline fares and alcohol.

Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives, thinks the U.S. is entering a six-month period of unusually high inflation.

“I do think we’re moving into a new phase where inflation is broader and where things are going to get a little more intense,” she said. “Part of that reflects that [supply-chain] bottlenecks are not resolved going into the holiday season, when a lot of purchases get made, and that the economy is doing really well, so you have strong demand.”

Ms. Rosner-Warburton sees a shift under way in which a wider range of factors will push up inflation, as opposed to the previous months’ increases, which were driven disproportionately by skyrocketing vehicle prices and the reopening of services after Covid-19 vaccines became available. “Part of [this] still seems likely to be transitory, but maybe not all of it,” she said.

Federal Reserve officials are closely watching inflation measures to gauge whether the recent jump in prices will be temporary or lasting. One such factor is consumer expectations of future inflation, which can prove self-fulfilling as households are more likely to demand higher wages and accept higher prices in anticipation of higher future price growth.

Consumers’ median inflation expectation for three years from now stayed at 4.2% in October, the same as in September, according to a survey by the New York Fed. That level is the highest since the survey began in 2013.

Unusually high demand—boosted by a long stretch of government stimulus and an improving job market—is a crucial factor driving higher inflation.

Consumer spending increased at an annual rate of 1.6% in the third quarter, a sharp slowdown from a 12% increase in the prior quarter. However, much of that deceleration was due to scarcity of new cars and other durable goods. Consumer spending on services last quarter climbed at the brisk annual rate of 7.9%.

Covid-19 continues to be a wild-card factor. The outbreak of the Delta variant put downward pressure at the end of the summer on prices for travel, recreation and other services that involve close interaction. Spending on services has bounced back in recent weeks as coronavirus infections fell, which could put further upward pressure on prices.

Ahmed said...


Dear Sir Riaz

Thanks for this post, you said:
---------------------------------------------------------------------------------
Just rebasing Pak Economy will result in at least 50% increase in official GDP.
--------------------------------------------------------------------------------

My Comment :
Sir what does it mean by "REBASING"?


Also I wanted to know that what is the exact GDP(Gross Domestic Product) of Pakistan now? Is it still US$ 400 billion or is it more now?

Pls do answer these questions.

Thanks

Rashid A. said...

This illustrates the impact of food inflation in Pakistan.

How much income of average person goes on food?

https://twitter.com/saleemfarrukh/status/1458491954040393729?s=21

1. Price of Roti=Rs15
2. Meals per day=3
3. Rotis per meal=2
4. Members in family=5
5. Cost of Rotis per family per month=Rs13,500
6. In Pakistan, the average per capita stands at Rs16,000 a month

Riaz Haq said...

Rashid: "This illustrates the impact of food inflation in Pakistan. How much income of average person goes on food?"

It seems to me that this man Farrukh Saleem (@SaleemFarrukh) doesn't really understand the difference between per capita income and household income.

If you go by his figures, the household income for a 5 person household is Rs 80,000 a month while the cost of rotis per month is Rs 13,500.

So the cost of rotis per month for this average family is 16% of the monthly income.

Rashid A. said...

You are right.

He is PhD in Economics, and for a while he was PMIK spokesperson on economic affairs. He was let go.

He is the biggest defender of Pak military’s budget in the media.

But regardless, you have a point.

He did not use the right number for Household income. Let us not ignore the message because of the sloppiness of the messenger.

Pakistan average Household Per Capita Annual Income in 2019 was $587.

https://www.ceicdata.com/en/indicator/pakistan/annual-household-income-per-capita

I am sure it has not gone up miraculously.

For a family of 5, The household annual income is $2935.

Monthly Household income: $244.

At todays (literally) exchange rate of $173, it is PKR: 42,313.

So, out of this 42,313, Roti alone, just Roti, would cost PKR 13,500. That is about 32%!!!!!!!!!

This is not All the food cost. It does not include, Ghee/oil, Onions, Tomatoes, Pulses, Vegetables, Rice spices, milk, sugar, tea, and little piece of meat once in a blue moon. And let us not forget water! Drinkable water is available only in bottles. The prices range from 10 (simple ROM process) to 40 (Nestle Pure Life)rupees per 10 liter bottle. A family of 5 uses 2 bottles per day.

https://knoema.com/atlas/Pakistan/topics/Food-Security/Expenditures-Spent-on-Food/Expenditure-on-food-per-capita

Total Food cost per capita in 2018 was $453 year.
It comes to PKR 32,653/ month.

Food cost is 77% of Household income. That

I am sure it has not gone down since 2018!

For comparison,

Average Household Food expense annual in 2020 was:
$7316.
https://www.statista.com/statistics/237211/average-food-expenditures-of-united-states-households/

And annual household income was $67,521.
https://www.statista.com/statistics/237211/average-food-expenditures-of-united-states-households/

In Pakistan, food cost is 77% of household income.
In US, it is 10.8%!!!

Remaining 23% of Pakistan household income or PKR 9,660 is left for Rent, Medicine, petrol or bus fare for commuting to work, clothing, education, medicine and health care.

Riaz Haq said...

Rashid: "Pakistan average Household Per Capita Annual Income in 2019 was $587. https://www.ceicdata.com/en/indicator/pakistan/annual-household-income-per-capita. I am sure it has not gone up miraculously. For a family of 5, The household annual income is $2935. Monthly Household income: $244"

Your figures are wrong. Pakistan's per capita income is about $1,200. For a household of 5, it is $6,000 a year, or $500 a month.

What a US$ buys in the US is a lot less than what it buys in India or Pakistan or Bangladesh.

All the income and expenditure figures reported by international agencies for comparison purposes are in purchase power parity (PPP) terms, not in official exchange rate terms.

The International Labor Organization (ILO) also reports wages in PPP terms. And its report says that the wages in Pakistan are among the highest in developing Asia.

Pakistan's total PPP GDP is $1.1 trillion and per capita GDP is $4,600.

All the indices, including Food Security and Affordability Index, use PPP figures.

Rashid A. said...

I knew PPP will show up sooner or later.

That is all fine.

If Pakistan per capita annual income is $4600,
then for a family of 5, it would be $23,000/year.

Monthly income: $1917.
In PKR: Average Pakistan Household monthly income @ PKR 173/$., it is PKR 331, 583. That is 3.3 Lacs/month!!!!!!!!

Is that believable? Does average Pakistani family make 3.3 lac/month. That is 11000 rupees / day.

And this is not median income. Median income wouod be much less because of population pyramid is very fat near the base.

A reality check is the best check on a theory.

Riaz Haq said...

Rashid: “In PKR: Average Pakistan Household monthly income @ PKR 173/$., it is PKR 331, 583. That is 3.3 Lacs/month!!!!!!!!”

The whole idea of PPP $ is to focus on buying power and to dispense with the official exchange rate to compare apples and apples. One US$ is currently worth about 4.40 PPP$. ( or one PPP $ equals about PKR 38)

Please check out the following:

Incomes of Pakistan’s poorest 20% rising faster than those of the richest 20%

https://www.riazhaq.com/2020/04/pakistan-plsmhies-incomes-of-poorest.html


Pakistan Living Standards Measurement Survey (PSLM/HIES) of 2018-19 has revealed that the incomes of the poorest Pakistanis are rising much faster than the those of their richest counterparts. The survey measures changes in incomes, expenditures and living standards of the population by quintiles on a periodic basis. The survey provides detailed outcome indicators on education, health, population welfare, housing, water sanitation and hygiene, information communication and technology (ICT), food insecurity experience scale (FIES) and income and expenditure.

PSLM/HIES 2018-19 compares incomes with those reported in PSLM/HIES 2015-16. It shows that the average household monthly income in Pakistan has jumped 16.5% to Rs. 41,545. It also shows that the average monthly income of the lowest quintile (Q1) in Pakistan rose 17.5% and that of the second lowest quintile (Q2) grew 22%, significantly faster than 11.7% for the middle quintile (Q3) and 12% and 5.1% for the top two quintiles (Q4 and Q5) respectively.

The average monthly income of Q1, the poorest quintile, stands at Rs. 23,192 in 2018-19. The second-lowest quintile’s income is Rs. 29,049. The middle-income group (Q3) is Rs. 31,373. The higher middle-income group’s average monthly income has increased to Rs. 37,643. The average monthly income of the top income group (Q4) is estimated at Rs. 63,544.

Riaz Haq said...

Double digit food inflation in US: Steaks have seen the highest price jump annually, costing 24.9% more in October. Eggs were 11.6% more expensive in October than a year ago, chicken cost 8.8% more, cereal was 5% more expensive, and baby food prices grew 7.9% annually.

https://www.cnn.com/2021/11/10/business/grocery-prices-inflation-meat/index.html

https://twitter.com/haqsmusings/status/1459560232674230277?s=20

Rashid A. said...

When you pump trillions of dollars of “helicopter money“ into the economic only, it is naive to think that inflation will not go up.

Money supply always has a positive correlation with inflation.

Helicopter money is like red flag in front of the fighting bull called inflation.

We are now in the midst of the worst vicious cycle in our seventy-four year financial history: skyrocketing inflation is devaluing the rupee and the devaluation is blowing up inflation.

https://www.thenews.com.pk/print/908520-food-inflation

Farrukh Saleem makes similar points I did.

There is no comparison between US and Pakistan.

Riaz Haq said...

Rashid: " Farrukh Saleem makes similar points I did. There is no comparison between US and Pakistan"

Farrukh Saleem doesn’t even know the basic difference between per capita and household income.

His hyperbole not withstanding, I don’t expect him to understand the impact of surging global commodity prices on each and every economy, including Pakistan’s. Such commodity boom and bust cycles are driven by imbalances in supply and demand. They are as old as the economic history of the world.

Please read the latest NY Times column by Nobel Laureate economist Paul Krugman on difference in inflation between Europe and the United States:

In the case of inflation, I’d say that the moral of the story is not to dwell too much on international differences in the latest print. The important point is that we’ve seen broadly similar inflation surges in many countries. Which tells you that what’s happening in the United States isn’t mainly about policy.

https://www.nytimes.com/2021/11/12/opinion/inflation-us-europe-covid.html

Riaz Haq said...

It’s not just the U.S.: Inflation alarm bells are also ringing in Japan and—most worryingly—in China

https://fortune.com/2021/11/11/us-inflation-rate-consumer-price-index-2021-china-japan/

On Thursday, Japan’s central bank reported that its wholesale inflation reached its highest level in 40 years, as Japan’s corporate goods price index (CGPI)—the average prices that companies charge one another for goods and services—spiked 8% in October from the same month a year ago.'
'
A steep increase in commodity prices helped drive the inflation. The price of lumber went up by 57% from one year ago for Japanese producers, while the price of coal and petroleum products rose by 44.5%.

Japanese firms have so far largely absorbed the rising costs. They're afraid that passing the increase along to consumers via higher prices will sap household spending, according to a Reuters poll of Japanese companies. Japan reported in September that consumer prices rose by 0.1%, the first uptick in 18 months.
-------

On Wednesday, China’s National Bureau of Statistics (NBS) reported that its producer price index rose by 13.5% in October from one year ago, the largest increase in 26 years. The index measures the prices that wholesalers pay to producers for materials when the goods leave the so-called factory gate, before additional costs like transport or distribution are added.

The figure beat analyst expectations of a 12.5% rise and were driven by increases in the prices of coal, oil, and steel, China economists Larry Hu and Xinyu Ji from Macquarie Group wrote in a note to Fortune.

Similar to Japan, China's sharp jump in wholesale prices has yet to lead to significant price increases for consumers, according to Wednesday's data. China’s NBS said consumer inflation rose by 1.5% in October compared to a year ago, up from a 0.7% rise in September.

While Chinese consumers are unlikely to immediately feel the inflationary pressures, rising factory gate prices may trigger anxiety for the rest of the world. China is the world’s largest exporter of goods and a critical link in global supply chains. Rising prices at Chinese factories could fuel “upward pressure on global inflation,” Ken Cheung, chief Asian foreign exchange strategist for Mizuho Bank, told CNN.

Riaz Haq said...

#Pakistan's #inflation rate has historically been high. It was 13% in 1995, 19.56% in 2009, 13.66% in 2011. Inflation was kept artificially low by keeping PKR significantly overvalued in 2013-2018 by #PMLN government. Overvalued currency hurt Pak #exports https://www.statista.com/statistics/383760/inflation-rate-in-pakistan/

https://twitter.com/haqsmusings/status/1459968580288540675?s=20

Riaz Haq said...

Pakistan Allows #India to Send #Wheat Overland Through its Territory as #Hunger Grips #Afghanistan. It'll be the first such consignment from #NewDelhi. #Pakistan, #Iran & #UAE have already been providing Afghanistan with food and medical supplies. https://www.bloomberg.com/news/articles/2021-11-15/pakistan-allows-india-to-send-wheat-as-hunger-grips-afghanistan

Pakistan will allow India to send 50,000 tons of wheat through its territory to neighboring Afghanistan, which is reeling under a severe hunger crisis as its economy has stalled since the Taliban took over in August, according to an Afghan government official.

Islamabad agreed to allow over land wheat shipments nearly a month after Kabul sought permission, Sulaiman Shah Zaheer, a spokesman of the Afghanistan Ministry of Commerce and Industries, said in a phone interview.

“The issue has now been resolved, and India can now send the wheat to Afghanistan via the Wagah border in Pakistan,” he said

The aid will be the first such consignment from New Delhi, which is yet to recognize the country’s new Taliban regime. Pakistan, Iran and U.A.E. are among the other nations that have provided Afghanistan with food and medical supplies. More than half of the country’s nearly 40 million people are likely to face acute food shortage and nine million are already on brink of starvation, according to a recent World Food Program report.

Pakistan’s Prime Minister Imran Khan had said that his country would “favorably consider the request by Afghan brothers for transportation of wheat offered by India through Pakistan on exceptional basis,” in a statement after a Nov. 12 meeting with Afghanistan’s Acting Foreign Minister Amir Khan Muttaqi.

There was no immediate comment from Pakistan officials Monday.

Last month Pakistan had denied India’s request to send the wheat because of the fractious relationship between the two South Asian nations.

Riaz Haq said...

#India’s wholesale price-based #inflation (WPI) in October rose to 12.54% from the previous month's 10.66%, remaining in double-digits for the seventh month in a row, government data showed on Monday. | Reuters

https://www.reuters.com/world/india/indias-oct-wpi-inflation-accelerates-five-month-high-1254-yy-2021-11-15/

India's annual wholesale price-based inflation, a proxy of producers' prices, accelerated in October to a five-month high, pushed up by increases in fuel and manufacturing prices, fuelling concerns of rising inflationary pressures for firms.

The gap between retail and wholesale price-based inflation has widened in recent months as many companies and retailers are still trying to absorb galloping input costs that threaten to hit their bottom lines.



Annual wholesale price-based inflation (INWPI=ECI) in October rose to 12.54% from the previous month's 10.66%, remaining in double-digits for the seventh month in a row, government data showed on Monday.

Consumer prices based inflation, the main gauge monitored by the monetary policy committee of Reserve Bank of India, rose 4.48% in October from the same month last year, speeding up from September's 4.35%, separate data released on Friday showed.



Economists said the recent cut in fuel tax rates by the government could lower pressures on households and companies in the short-term, but firms are trying to pass on rising costs as domestic demand picks up.

In the April-June quarter, the economy grew an annual 20.1%, and the central bank expects GDP to expand 9.5% in the current fiscal year ending in March 2022.



Wholesale fuel and power prices rose 37.18% in October year-on-year compared with 24.81% in September, while manufactured product prices rose 12.04% compared with 11.41% in the previous month, data showed.

Wholesale prices of food accelerated at a 3.06% pace in October from a year earlier compared with 1.14% in the previous month.

The RBI's monetary policy committee is scheduled to meet Dec. 6-8 and is widely expected to leave the repo rate unchanged at 4%.

Riaz Haq said...

'High inflation: no room for excuses': MoF clarification - Pakistan - Business Recorder



https://www.brecorder.com/news/40133523


Average core inflation during PTI first three years has recorded at 6.9% vs headline inflation 8.8%. If we compare with PML (N)'s average core inflation (6.0%) it was much higher than headline inflation (4.82%). This indicates that the competitiveness during PMLN was compromised as reflected from higher trade deficits due to contraction in export growth (2014-18).

While PPP stand out in headline, core and food inflation with record double digit witnessed in all categories- Headline inflation (13.82%), Core (11.4%), and Food (15.48%). Food inflation in PTI term is question marked and perhaps the only factor which is eating up the PTI political capital in last three years.

Logically, speaking the food price hike is linked with country's food security; PMLN has destroyed the country's comparative advantage of being agricultural country, through serving its vested interests. It is pertinent to note that average agriculture growth (2.18%) during PMLN were lowest since 1990s and even worst when we just focus on crop growth statistics (0.68%).

Agriculture crop growth recorded lowest in PMLN term- Average 0.68%, PPP 1.33% & PTI 1.76%. Despite the locust attack, the PTI government has successfully turned around the crop sector through incentivizing the farmers via attractive support prices, cheaper inputs, and timely payment of crops. Moreover, the focus has further sharpened by issuing the Kissan cards and loans to farmers.

Going forward, we are expecting bumper Kharif crops, and this will add huge sum to rural economy, never seen in last 13 years. Below is the crops target for FY22 and from where PTI took over.

Similarly, PTI government has been wrongly blamed for crisis in the energy sector. Under its belt, it has the credit to negotiate the IPP deals of 1994 & 2002 policies. This has saved hundreds of billion rupees. Despite Covid, Government has managed to bring the circular debt in FY21 to just Rs130 bn from more than Rs 450bn. Currently, the bigger issue for country is going through the excess capacity committed by PML-N government on 'Take or Pay' basis.

This has accumulated the huge capacity payments and in turn circular debt. Number of measures is already in place to improve the electricity consumption, but one cannot avoid the higher tariff to mitigate the looming power crisis.

We are confident of dealing with the structural deficit of the country, but it requires the exogenous crisis to stem first. Not to forget, we had to deal with default risk, higher deficits, threat from India, Covid, and off late Afghan issue and global inflation woes just in last 36 months, but even then, we manage to bring growth back on track.

Lastly, to protect the vulnerable, a relief package of Rs. 120 billion is announced to provide 30 percent discount on ghee, flour, and pulses to 130 million people for next six months. This is over and above of budgetary allocation for FY 2021-22 for EHSAS Program of Rs. 260 billion.

Rashid A. said...

Good thread on Food Security in Pakistan.

https://twitter.com/umar_aziz_khan/status/1461060478877290499?s=21


Riaz Haq said...

Rashid: " Good thread on Food Security in Pakistan. https://twitter.com/umar_aziz_khan/status/1461060478877290499?s=21"


In his twitter thread, Muhammad Umar Aziz is using Global Food Security Index that I also used in my blog post. He is comparing Pakistan with global averages while I used regional comparisons. Pakistan (with 52.6 points) has scored better than Bangladesh (48.8), Nepal (48.3) and India (50.2 points) in terms of food affordability. Sri Lanka scored higher with 62.9 points in this category on the GFS Index 2021, according to a global report released by Economist Impact and Corteva Agriscience recently.

Rashid A. said...

He does compare it to world average, but if you delve deeper he does discuss India and Bangladesh Aldo.

But what he is saying is Pakistan was improving and closing the gap with world average until 2918/19. Then it went downhill.

Riaz Haq said...

Rashid: "But what he is saying is Pakistan was improving and closing the gap with world average until 2918/19. Then it went downhill"

Increased food insecurity in Pakistan in 2020-21 is not a surprise.
The COVID pandemic has created lots of economic issues, particularly in the developing countries like India, Pakistan, Bangladesh.

Even the US wasn't spared. https://www.npr.org/2020/09/27/912486921/food-insecurity-in-the-u-s-by-the-numbers

Nearly 1 in 4 households have experienced food insecurity this year
Even before the pandemic hit, some 13.7 million households, or 10.5% of all U.S. households, experienced food insecurity at some point during 2019, according to data from the U.S. Department of Agriculture. That works out to more than 35 million Americans who were either unable to acquire enough food to meet their needs, or uncertain of where their next meal might come from, last year.

Riaz Haq said...

How happy or miserable are we? - Newspaper - DAWN.COM
Inbox

https://www.dawn.com/news/1657633

The simple misery index has been modified by other economists like Robert Barro of Harvard and recently by Steve Hanke of Johns Hopkins Univer­sity. In Hanke’s formulation lending rates are added because higher lending rates cause misery. Growth in real per capita GDP is subtracted as it causes happiness. This formulation helps make a country by country comparison easier. Hanke has calculated this index for 156 countries for 2020 and ranked these countries from the most to the least miserable.

Venezuela ranks first (most miserable) and its neighbour, Guyana ranks 156 (least miserable or most happy). Why was Guyana most happy in 2020? It struck oil in 2019 and as a result, real GDP per ca­­pita increased by 25.8pc in 2020. Next to Vene­zue­­la in misery are Zimbabwe and Sudan. And next to Gu­­yana in happiness are Taiwan and Qatar. As we are always obsessed with comparisons with India, it may not hurt us to know that India is higher in misery (in­­dex 35.8, rank 39) than Pakistan (index 32.5, rank 49.) Bangladesh is better than both India and Pakis­tan with a misery index of 14 and rank of 129.


https://www.cato.org/commentary/hankes-2020-misery-index-whos-miserable-whos-happy

Riaz Haq said...

2020 labor force participation rate in Pakistan is 50.2%, higher than India's 46.3% but lower than Bangladesh's 55.7%.

https://www.ceicdata.com/en/indicator/india/labour-force-participation-rate


https://www.macrotrends.net/countries/PAK/pakistan/labor-force-participation-rate


https://www.macrotrends.net/countries/IND/india/labor-force-participation-rate