In Pakistan, general price level is persistently rising since partition of the subcontinent. This is due to the declining economic growth, expansionary policies, out put setbacks, higher taxes and a depreciation of rupee.
Generally, the whole world is facing the problem of price like, but in Pakistan it has become a severe problem with more than 11% inflation rate per annum, which is the highest in the world. It is considered that inflation rate from 2 to 3% is necessary for the proper growth of economy but if it exceeds from this limit, then it becomes a problem.
Major cause of increase in the price level is an increase in currency or credit money. Increase in stock of money induces people to demand more and more of goods and services. The policy of deficit financing has led to an increase in the quantity of money in the country.
If these policies are continued, there is no chance that the public will get some respite. The monster of inflation will continue growing till there is no stopping this monster.
MADIHA ASHRAF
Karachi