Inflation is at its peak all over the world and there are different reasons for it. In the case of Pakistan, it is the result of monetary phenomenon. The reason is that excess money supply growth in Pakistan has basically enhanced inflation in Pakistan. According to economic policy announced in Pakistan, the CPI of Pakistan dropped to 19.1% in March 2009 as compared to 25% in August 2008.
In Pakistan the main reason of inflation is the increase in the prices of regular items, such as wheat, sugar, ghee and other items. The government has totally failed to control the prices of these items. Petrol price hikes is the second main cause. When oil prices are increased it affects prices of its complementary goods too. Such as transportation fares, etc. Thirdly, most of the industries are closed due to government policies creating unemployment.
Pakistan is a developing country. Inflation is one of the major problems of this country. In fact, it is the root cause of oodles of problems in the country.
This is to draw the attention of authorities towards the urgent need of such actions that may decrease the inflation rate in our country.
MARYUM BINTE MAZHAR
Lahore