Daily Times

Sir: I wish to talk about the problem of rising inflation in our country. Inflation can be defined as a situation where the general price level is persistently moving upwards. Pakistan’s population comprises about 18 million persons and inflation is one of the major problems plaguing the country.

The last five years are considered to be a highly inflationary period due to a number of mini-budgets and imposition of taxes and duties on petroleum products by the government. Inflation is one of the major obstacles to the development of any economy in the world. The inflation rate was recorded at 13.04 percent in April 2011. From 2003 to 2010, the average inflation rate in Pakistan stood at 10.15 percent.

The major causes of inflation are excessive money-printing, increasing rates of raw materials and products, an imposition of taxes after shorter intervals, less investment and rampant corruption.

Inflation adversely affects overall economic growth, the financial sector’s development and exploits the vulnerable poor segments of society. Inflation also decreases real incomes and induces uncertainty.

The government needs to control inflation through proper strategic planning. Domestic production should be encouraged instead of imports, investment should be given preference in consumer goods instead of luxuries, the agriculture sector should be given subsidies, foreign investment should be attracted and business groups from developed countries should be invited to make investments in the country’s various sectors. Lastly, a strong monitoring system should be established at different levels in order to have a sound evaluation of every process at every stage.

MAHA ASHRAF

Karachi