Another low: Inflation in March clocks in at 2.5%

[Faiez]

Indeed you're not economist.

Neither is this gov't. If they had common sense, they would have sold price at 100 rupees a liter like its neighboring countries (minus Iran). But it didn't.

while on topic, deflation is not going to happen. Our economy isn't too stable. As oil price will rise this month, goods prices will rise as well. Deflation would be serious thread if oil prices continue to fall and blah blah.

In short, economy isn't going to shambles.

And why would that be a bad thing ?

Do you even have any clue as to why economists view deflation as a bad thing ?

Let me explain, it is not deflation that is bad, it is what it signifies that COULD be bad. The cause of deflation in most cases is a drop of demand (people not spending as much all of a sudden). Now that's obviously a bad thing. How ever if prices are falling due to technology improvements, it's a great thing, nothing to worry about. In the case of oil prices falling, Pakistan does not produce most of the oil consumption, so a drop in oil demand internationally resulting in low oil prices is not for pakistan to worry about, it's for oil producers to worry about, it's their business.

If oil prices continue to fall and as a result, prices of commodities closely tied to oil prices also fall, it would be a GOOD THING, it will encourage more spending and would help the economy as people will now have alot of money freed up (which was previously spent on oil products) to spend on other stuff. Low oil prices is a huge opportunity for countries that don't produce oil.

Actually the reason our prices haven't fallen (and actually rose) is because our dollar tumbled a lot. Though most of the world lost vs USD, we lost 24% something.

The dollar didn't tumble on it's own...The state bank of pakistan artificially lowered the exchange rates by injecting large amounts of FX into currency markets...

 

[WishLivePak]

And why would that be a bad thing ?

Do you even have any clue as to why economists view deflation as a bad thing ?

Let me explain, it is not deflation that is bad, it is what it signifies that COULD be bad. The cause of deflation in most cases is a drop of demand (people not spending as much all of a sudden). Now that's obviously a bad thing. How ever if prices are falling due to technology improvements, it's a great thing, nothing to worry about. In the case of oil prices falling, Pakistan does not produce most of the oil consumption, so a drop in oil demand internationally resulting in low oil prices is not for pakistan to worry about, it's for oil producers to worry about, it's their business.

If oil prices continue to fall and as a result, prices of commodities closely tied to oil prices also fall, it would be a GOOD THING, it will encourage more spending and would help the economy as people will now have alot of money freed up (which was previously spent on oil products) to spend on other stuff. Low oil prices is a huge opportunity for countries that don't produce oil.



The dollar didn't tumble on it's own...The state bank of pakistan artificially lowered the exchange rates by injecting large amounts of FX into currency markets...

Please learn to read. I was talking about Canadian dollar to him