"Conventional economics tells us that oil price hikes trigger a chain reaction across the economy. They increase transportation costs, push up the prices of daily-use commodities and food items, raise the overall cost of living, reduce purchasing power, increase poverty and unemployment, slow economic activity and eventually fuel public discontent as quality of life deteriorates."
"The Committee noted that prolonging the Middle East conflict has intensified risks to the macroeconomic outlook. In particular, the global energy prices, freight charges and insurance premiums continue to remain significantly above pre-conflict levels."
Pakistan's fuel import bill has skyrocketed from $300 million to $800 million, creating severe economic pressure. This unprecedented fuel price shock threatens to destabilize the economy and undermine the government. Analysts warn of cascading crises affecting agriculture, transport, and the prices of essential goods. The State Bank of Pakistan raised its key policy rate to 11.5 percent due to heightened risks from the ongoing Middle East conflict, which has led to increased global energy prices and supply chain disruptions, worsening inflation and economic conditions.
Read at www.aljazeera.com
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