Right after coming to power, Prime Minister Imran Khan’ prioritised protecting the weak and stabilising the economy. He undertook various strategic measures to enhance revenue through proper taxation, control of money laundering. As a result, huge sums of money parked in high-value prize bonds were brought under legitimate deposits while salaries were increased to jack the sources of income. However, with the global food prices rising by around 50 per cent due to the coronavirus epidemic, the rise and pressure on the rupee have further pushed up prices of food items. With a significant decline in domestic agricultural production and an even greater increase in demand, high food prices continue to persist as the order of the day. Still, special measures are being taken to overcome all these problems. At the moment, global economic institutions are talking about signs of the Pakistani economy improving. The government also claims to have improved the international payments situation and continues to work on effective economic measures. Although the IMF has signalled a further rise in inflation, it has also noted that this could be curbed if the government took appropriate measures. The Ministry of Finance has, meanwhile, informed about potential risks to Pakistan’s economy and stated that an increase in international commodity prices could build pressure on the country’s domestic inflation as well as on the Balance of Payments (BoPs). In its monthly economic outlook for August 2021, the ministry stated that the risk of pandemics still existed. Since the government is following smart lockdown policies, restricting indoor activities may have some impact on businesses, especially those related to private services. In an economy like Pakistan, inflation is not only certain, but it becomes difficult to achieve proper targets. The revival of economic activities along with an accelerated vaccination process comes with strong expectations about economic growth in FY2022. Pakistan’s inflation rate is mainly driven by current and past fiscal and monetary policies, international commodity prices, the USD exchange rate, seasonal factors and economic agents’ expectations concerning the future developments of these indicators. It is appreciable that the government’s structural policies are playing a pivotal role in improving the functioning of markets, particularly the food markets’ role in overcoming the situation. Presently, Pakistan is a large economy with a steady increase in foreign exchange reserves for which attractive incentives were given to overseas Pakistanis to increase their savings in Pakistan through proper accounts. In an economy like Pakistan, where there is a lack of real productive sectors and the economy thrives on sectors like real estate, consumer finance, etc., inflation is not only certain, but it becomes difficult to achieve proper targets. Since the start of the pandemic, the inflation rate has been clocking higher than business as usual worldwide due to an increased money supply by central banks and Pakistan is no exception. Amid a weaker dollar, declining global production and consumption levels, the government decided to boost exports by allowing the overvalued rupee to float freely. It worked for a while, and to some extent, as global supply chains were disrupted, but now the shopping spree seems to be over. The trade deficit is rising again as fuel imports are getting expensive and exports are not growing anymore, making it a double whammy of high inflation and worsening trade deficit. The government has given prime importance to agriculture being the mainstay of economic growth due to its linkages with employment, trade and food security. In this regard, the government has taken steps for supplying improved seeds and fertiliser for enhancing agriculture credit for mechanised farming, agro-based industries and cold chains as well as storage facilities. Further, a network of agri-malls is proposed to be spread across the country to minimise the role of the middle man. An additional Rs 25 billion is being allocated for the development of the agriculture sector. Thus, the agriculture sector is expected to perform well in absence of any adverse climate shock. Industrial activity, measured by the LSM index, is the sector most exposed to external conditions, like developments in international markets. Since March 2021, the LSM index recorded double-digit YoY growth numbers. It is expected that trend will continue in July FY2022 as well. These staggering high growth rates of the LSM output reflect low base effects and the strong momentum of the current economic expansion. It is expected that the trade deficit in goods and services could stabilise approximately $3 billion in the coming days with expectations about remittances to be stabilised around $2.5 billion, taking into account the other secondary income and primary income flows. According to a recent World Bank report, 80 per cent of Pakistanis are affecting, due to food inflation because the daily income of more than 80 per cent of the population is less than two dollars. According to this, common people can’t afford necessities like food because of inflation. However, to address this situation, the “Ehsas Programme” is playing a vital role in resolving the living problems of the marginalised population. The government should use different techniques to control inflation. Every method has different effects. Some work well in controlling inflation by wage and price control, dynamic changes in monetary policy, to reduce the money supply within an economy by declining bond prices and increasing interest rates. This helps reduce spending because when there is a limited amount of money to go around, those who have money want to keep it and save it instead of spending it. Another domain in which the government is doing well is increasing the reserve requirement in the amount of money that banks are legally required to keep on hand for covering withdrawals. The more money banks are required to hold back, the less they have to lend to consumers. If they have less to lend, consumers will borrow less, which will decrease spending. Another tool is a (direct or indirect) reduction in the money supply. Calling in debts, which are owed to the government, and increasing the interest paid on bonds (so that more investors will buy them) are some of the lucrative policies required to increase public savings. The writer is a socioeconomic analyst and can be reached at hamiddawoodi@gmail.com.