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CAUSES OF INFLATION IN PAKISTAN 1- POOR MONITORY POLICY

The government of Pakistan prints too much money in the country. The circulation of money increases in the markets and due to this fact the prices of the goods increases day by day.

As shown in the graph the dollar value increased and rupee value decreased day by day.

2- SLOW ECONOMIC GROWTH

The economic growth in our country is very low; the government could not have any interest to open new industries in Pakistan. Due to this fact the demand of the commodity is increasing. Supply is less then demand and it results in inflation.

2 The industry sector of Pakistan is growing but growth rate is slower then the population growth. Our resources are fewer then from our all population. So it is causing inflation in Pakistan.

3- DEPRICATION IN HOME CURRENCY

We know that the value of dollar is increasing day by day as compared to rupee. The price of dollar is moving upward; in the beginning government decreased the rupee value because they want to increase exports but they failed to increase exports so as a result the dollar value is increasing day by day and rupees is decreasing.

4- POLITICAL INSTABILITY
A serious problem in Pakistan is political instability. One government come and starts the new projects then suddenly it goes due to some political instability. Another political or dictator government takes over the old government and they start their own projects from scratch; this process is looping again and again. Due to this fact lot of money invested on different projects but the result is zero.

5- IMPORTS
We invest a lot of money as a government or individual on import of finished goods like oil and vehicles. The costs of these goods are very high and we have to invest a lot of money on these imports. The profit margin is low and retail price is very high on these imports of finished goods. This is also a big reason of inflation in Pakistan.

As shown in the graph the imports of Pakistan is increasing day by day and exports are decreasing as compared to imports.

6- PAPULATION GROWTH
The population of the Pakistan is increasing day by day so it causing high rate demand but as compare to demand our resources are limited.

As shown in graph the population is increased in Pakistan at rate of 2.14% per year. This is very high ratio of increasing population.

7- BLACK MONEY
Black money is another huge factor which increases inflation in Pakistan. The smugglers smuggles the goods from Pakistan to other countries where the prices are high, they earn money but in Pakistan the demand of the product increases and supply remains the same. As a result the demand pool inflation arises and as a result the prices of goods increase.

8 Higher Duties
The excise rate in Pakistan is very high this is the basic reason of inflation. Because, the rate of high duties increased the cost of the products and retail price become high.