Today, inflation is one of the serious problems faced by Pakistan. Pakistan’s annual inflation rate increased to 12.55 percent in September of 2019 from 11.63 percent in the previous month. It was the highest inflation rate since June of 2011.
The rate of inflation in Pakistan is very high. The causes of inflation in Pakistan is due to increase in demand and decrease in supply. It is a huge problem for employees, taking fixed salaries. It generates an unfair distribution of income and wealth. It is a cause of unfavorable balance of trade and payment. It creates a lot of social evils. It is difficult for consumers to purchases more goods. It generates very bad effects on the poor labor force.
This can be controlled through an Increase in the growth rate of output. The government should control the supply of money through an effective monetary policy. Highly increasing unproductive expenditures must be controlled. Control on population is also necessary to control inflation. Improvement in the balance of payment should also be done. The effective operation of monetary and fiscal policy is essential to control inflation.
