Inflation in Pakistan has been on the rise due to several key factors. First, excessive money supply, often caused by the government printing more money or borrowing excessively, can lead to too much money chasing too few goods and services. This increases demand and drives up prices.
Second, supply chain disruptions, which can be caused by global events like the COVID-19 pandemic or local issues like energy shortages, can limit the availability of goods and services, causing prices to surge.
Third, rising energy prices can contribute significantly to inflation, as they impact the cost of production and transportation, which gets passed on to consumers in the form of higher prices for various products.
Fourth, exchange rate fluctuations can also play a role. If the Pakistani Rupee weakens against other currencies, it can increase the cost of imported goods and raw materials, further driving up prices domestically.
Lastly, expectations of future inflation can become self-fulfilling. If people expect prices to rise, they may demand higher wages, and businesses may increase prices in anticipation of higher costs in the future, creating a cycle of inflation.
In summary, inflation in Pakistan is driven by excessive money supply, supply chain disruptions, rising energy prices, exchange rate fluctuations, and inflation expectations. Addressing these issues through effective economic policies and reforms is essential to curb inflation and ensure stable prices for consumers.
The writer Is the student of Department of Journalism at Punjab University Lahore and she can be contacted at: firstname.lastname@example.org