Through your newspaper, I would like to draw the attention of the authorities concerned towards inflation in our country. One of the most important factors contributing to poverty in Pakistan is inflation. Inflation is defined as a situation where the general price level in any country is persistently moving upwards.

The last five years of Pakistan’s economy were regarded as highly inflationary periods due to an expansionary monetary policy and the high oil prices. Inflation is one of the major obstacles in the way of development of an economy. The inflation rate was recorded at 13.04 percent in April 2011.

From 2003 till 2010, the average inflation rate in Pakistan was 10.15 percent. One of the main causes of inflation has been the excess printing of banknotes, high prices of raw materials and finished products, high taxes, as well as corrupt practices that result in the price level increases. Inflation adversely affects the overall economic growth, the financial sector development, and exposes the poor to exploitations. Inflation also erodes the real income and induces uncertainty among investors.

Inflation needs to be controlled in Pakistan through strategic planning. The use of domestic products should be encouraged instead of imports, investment in the production of essential commodities should be focused on instead of on the production of luxuries. The agriculture sector should be given subsidies. Foreign investment should be encouraged. Developed countries should be requested for financial and managerial assistance. If we take keen interest in managing the effects of inflation, this problem can be overcome.

MUNIB-UL-HASSAN,

Lahore.